innovation – Page 2

The NextGen ACO: Another Round Opens

December 15, 2016January 18, 2017 Admin

The Centers for Medicare and Medicaid Innovation has announced the results of its ‘continuous learning‘ commitment model wherein ‘field reports‘ including provider comments and open door inputs are materially incorporated into tweaks of the Medicare Shared Savings Program (MSSP) as risk is progressively adopted by participating ACOs. This ‘new round’ iteration no doubt includes ‘lessons learned‘ from the Pioneer ACO Program including the many ‘exits’ and risk downgrades opted to date.

In summary, this round is:

‘..one that sets predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality standards of care.’

screen-shot-2016-12-15-at-9-49-21-am

For complete information, see: ‘Next Generation ACO Model | Center for Medicare & Medicaid Innovation‘.

ACO Winners and Losers: A Quick Take

August 30, 2016August 30, 2016 Admin

by Ashish K. Jha

Last week, CMS sent out press releases touting over $1 billion in savings from Accountable Care Organizations.

Here’s the tweet from Andy Slavitt, the acting Administrator of CMS:

The link in the tweet is to a press release. The link in the press release citing more details is to another press release. There’s little in the way of analysis or data about how ACOs did in 2015. So I decided to do a quick examination of how ACOs are doing and share the results below.

Basic Background on ACOs:

Simply put, an ACO is a group of providers that is responsible for the costs of caring for a population while hitting some basic quality metrics. This model is meant to save money by better coordinating care. As I’ve written before, I’m a pretty big fan of the idea – I think it sets up the right incentives and if an organization does a good job, they should be able to save money for Medicare and get some of those savings back themselves.

ACOs come in two main flavors: Pioneers and Medicare Shared Savings Program (MSSP). Pioneers were a small group of relatively large organizations that embarked on the ACO pathway early (as the name implies). The Pioneer program started with 32 organizations and only 12 remained in 2015. It remains a relatively small part of the ACO effort and for the purposes of this discussion, I won’t focus on it further. The other flavor is MSSP. As of 2016, the program has more than 400 organizations participating and as opposed to Pioneers, has been growing by leaps and bounds. It’s the dominant ACO program – and it too comes in many sub-flavors, some of which I will touch on briefly below.

A couple more quick facts: MSSP essentially started in 2012 so for those ACOs that have been there from the beginning, we now have 4 years of results. Each year, the program has added more organizations (while losing a small number). In 2015, for instance, they added an additional 89 organizations.

So last week, when CMS announced having saved more than $1B from MSSPs, it appeared to be a big deal. After struggling to find the underlying data, Aneesh Chopra (former Chief Technology Officer for the US government) tweeted the link to me:

You can download the excel file and analyze the data on your own. I did some very simple stuff. It’s largely consistent with the CMS press release, but as you might imagine, the press release cherry picked the findings – not a big surprise given that it’s CMS’s goal to paint the best possible picture of how ACOs are doing.

While there are dozens of interesting questions about the latest ACO results, here are 5 quick questions that I thought were worth answering:

How many organizations saved money and how many organizations spent more than expected?
How much money did the winners (those that saved money) actually save and how much money did the losers (those that lost money) actually lose?
How much of the difference between winners and losers was due to differences in actual spending versus differences in benchmarks (the targets that CMS has set for the organization)?
Given that we have to give out bonus payments to those that saved money, how did CMS (and by extension, American taxpayers) do? All in, did we come out ahead by having the ACO program in 2015 – and if yes, by how much?
Are ACOs that have been in the program longer doing better? This is particularly important if you believe (as Andy Slavitt has tweeted) that it takes a while to make the changes necessary to lower spending.

There are a ton of other interesting questions about ACOs that I will explore in a future blog, including looking at issues around quality of care. Right now, as a quick look, I just focused on those 5 questions.

Data and Approach:

I downloaded the dataset from the following CMS website: https://data.cms.gov/widgets/x8va-z7cu and ran some pretty basic frequencies.

Here are data for the 392 ACOs for whom CMS reported results:

Question 1: How many ACOs came in under (or over) target?

Question 2: How much did the winners save – and how much did the losers lose?

Table 1.

	Number (%)	Number of Beneficiaries	Total Savings (Losses)
Winners	203 (51.8%)	3,572,193	$1,568,222,249
Losers	189 (48.2%)	3,698,040	-$1,138,967,553
Total	392 (100%)	7,270,233	$429,254,696

I define winners as those organizations that spent less than their benchmark. Losers were organizations that spent more than their benchmarks.

Take away – about half the organizations lost money and about half the organizations made money. If you are a pessimist, you’d say, this is what we’d expect; by random chance alone, if the ACOs did nothing, you’d expect half to make money and half to lose money. However, if you are an optimist, you might argue that 51.8% is more than 48.2% and it looks like the tilt is towards more organizations saving money and the winners saved more money than the losers lost.

Next, we go to benchmarks (or targets) versus actual performance. Reminder that benchmarks were set based on historical spending patterns – though CMS will now include regional spending as part of their formula in the future.

Question 3: Did the winners spend less than the losers – or did they just have higher benchmarks to compare themselves against?

Table 2.

	Per Capita Benchmark	Per Capita Actual Spending	Per Capita Savings (Losses)
Winners (n=203)	$10,580	$10,140	$439
Losers (n=189)	$9,601	$9,909	-$308
Total (n=392)	$10,082	$10,023	$59

A few thoughts on table 2. First, the winners actually spent more money, per capita, then the losers. They also had much higher benchmarks – maybe because they had sicker patients – or maybe because they’ve historically been high spenders. Either way, it appears that the benchmark matters a lot when it comes to saving money or losing money.

Next, we tackle the question from the perspective of the U.S. taxpayer. Did CMS come out ahead or behind? Well – that should be an easy question – the program seemed to net savings. However, remember that CMS had to share some of those savings back with the provider organizations. And because almost every organization is in a 1-sided risk sharing program (i.e. they don’t share losses, just the gains), CMS pays out when organizations save money – but doesn’t get money back when organizations lose money. So to be fair, from the taxpayer perspective, we have to look at the cost of the program including the checks CMS wrote to ACOs to figure out what happened. Here’s that table:

Table 3 (these numbers are rounded).

	Total Benchmarks	Total Actual Spending	Savings to CMS	Paid out in Shared Savings to ACOs	Net impact to CMS
Total (n=392)	$73,298 m	$72,868 m	$429 m	$645 m	-$116 m

According to this calculation, CMS actually lost $116 million in 2015. This, of course, doesn’t take into account the cost of running the program. Because most of the MSSP participants are in a one-sided track, CMS has to pay back some of the savings – but never shares in the losses it suffers when ACOs over-spend. This is a bad deal for CMS – and as long as programs stay 1-sided, barring dramatic improvements in how much ACOs save — CMS will continue to lose money.

Finally, we look at whether savings have varied by year of enrollment.

Question #5: Are ACOs that have been in the program longer doing better?

Table 4.

Enrollment Year	Per Capita Benchmark	Per Capita Actual Spending	Per Capita Savings	Net Per Capita Savings (Including bonus payments)
2012	$10,394	$10,197	$197	$46
2013	$10,034	$10,009	$25	–$60
2014	$10,057	$10,086	-$29	-$83
2015	$9,772	$9,752	$19	-$33

These results are straightforward – almost all the savings are coming from the 2012 cohort. A few things worth pointing out. First, the actual spending of the 2012 cohort is also the highest – they just had the highest benchmarks. The 2013-2015 cohorts look about the same. So if you are pessimistic about ACOs – you’d say that the 2012 cohort was a self-selected group of high-spending providers who got in early and because of their high benchmarks, are enjoying the savings. Their results are not generalizable. However, if you are optimistic about ACOs, you’d see these results differently – you might argue that it takes about 3 to 4 years to really retool healthcare services – which is why only the 2012 ACOs have done well. Give the later cohorts more time and we will see real gains.

Final Thoughts:

This is decidedly mixed news for the ACO program. I’ve been hopeful that ACOs had the right set of incentives and enough flexibility to really begin to move the needle on costs. It is now four years into the program and the results have not been a home run. For those of us who are fans of ACOs, there are three things that should sustain our hope. First, overall, the ACOs seem to be coming in under target, albeit just slightly (about 0.6% below target in 2015) and generating savings (as long as you don’t count what CMS pays back to ACOs). Second, the longer standing ACOs are doing better and maybe that portends good things for the future – or maybe it’s just a self-selected group that with experience that isn’t generalizable. And finally, and this is the most important issue of all — we have to continue to move towards getting all these organizations into a two-sided model where CMS can recoup some of the losses. Right now, we have a classic “heads – ACO wins, tails – CMS loses” situation and it simply isn’t financially sustainable. Senior policymakers need to continue to push ACOs into a two-sided model, where they can share in savings but also have to pay back losses. Barring that, there is little reason to think that ACOs will bend the cost curve in a meaningful way.

==##==

Post originally appeared at An Ounce of Evidence | Health Policy: The blog of Ashish Jha — physician, health policy researcher, and advocate for the notion that an ounce of data is worth a thousand pounds of opinion.

Accountable Care, ACO, Affordable Care Act

The Long and Winding Road to Healthcare Price Transparency

August 4, 2016January 4, 2018 Admin

by Gregg A. Masters, MPH

When Steven Brill published ‘Bitter Pill: Why Medical Bills Are Killing Us‘ in 2013 he brought national attention via a series of personal stories that served to reveal the complex dysfunction inherent in our healthcare delivery and financing system. A veritable ‘conundrum‘ created over the decades of layering managed care complexity (pre-certification, prior authorization, referral management, contract payment adjudication, etc.) on top of the arguably burning ‘fee-for-services’ platform that incentivizes the prevailing ‘do more [units] to earn more [income]’ mentality of hospitals, physicians and allied healthcare practitioners who do not operate in a pre-paid or per member per month capitated environment.

Central to Brill’s narrative was the hospital ‘charge master‘, typically a made up fictional schedule of retail (sticker shock) values with ZERO relationship to the actual cost of services provided nor what would ultimately be paid by the patient or third party on his or her behalf.

Brill admonishes readers to:

Pay no attention to the chargemaster – No hospital’s chargemaster prices are consistent with those of any other hospital, nor do they seem to be based on anything objective — like cost — that any hospital executive I spoke with was able to explain. “They were set in cement a long time ago and just keep going up almost automatically,” says one hospital chief financial officer with a shrug.

Most of us are fortunate enough to have 3rd party coverage via our employer or Government funded programs like Medicare, Medicaid, etc., and benefit from deeply discounted intermediary ‘wholesale rates‘ often beginning at 50% of the published charge master rates.

Ironically, those who of us absent this ‘buffer’ and who could least bear the sticker shock burden associated with arbitrary (no relationship to cost) charge master pricing, i.e., the un and under insured, paid the steepest price, see: ‘Medical Bills Are the Biggest Cause of US Bankruptcies: Study‘.

Consumer Directed Health Plans and the ‘Empowered Patient’ Mandate

Since the launch of the Health 2.0 movement and arguably the ‘digital health‘ innovation industry writ large by co-founders Matthew Holt and Indu Subaiya, MD, some of the start-ups launched addressed the problem of price transparency ‘workarounds’ via back end building of ‘virtual’ contract rate books through platform user submissions of EOBs detailing the charge basis and ultimate contract repricing per the health plan negotiated rate of the services rendered and paid. Some of the companies operating in the space, though not necessarily back-ending virtual rate books, include: Medlio, Change Healthcare, Healthcare Bluebook and Castlight Health, see: ‘8 companies working on healthcare price transparency‘.

Clearly the ‘holy grail‘ here is contract rate-book transparency, but don’t hold your breath. These rates are deemed proprietary and thus closely guarded ‘trade secrets’.

So fast forward to today. It’s 2016 (some 43 years post HMO Act) and healthcare inflation which has shown remarkable restraint principally due to the lingering impact of the great recession of 2008, coupled with the health insurance industry’s new found love affair fueled by the ACA with so called ‘consumer directed health plans‘ (aka code for the ‘cost shifting’ charade). Think of it this way, massive health plans, pooling millions of lives, extracting maximum pricing leverage from providers and exercising varying degrees of medical management oversight have explicitly admitted that as an industry they can NOT manage clinical risk, thus have chosen make provider pricing restraint ‘our’ problem. Afterall, they reasoned the required (mythical absence of?) ‘skin in the game‘ of high deductibles, non-covered services, copayments and co-insurance drives granular price sensitivity since the once 3rd party buffer (if it ever existed) is no longer present to immunize our exposure to the cost of utilizing healthcare services.

Last month The Health Care Incentives Improvement Institute (HCI3 ) and Catalyst for Payment Reform (CPR) issued the fourth installment of the ‘Report Card on State Price Transparency Laws‘. The picture below tells the less than pretty story:

They open the report noting:

Despite the full integration of price information into almost every other retail experience, it’s typical in American health care for consumers to go into an appointment or procedure knowing nothing about what it will cost until long afterward

And conclude as follows:

Our 2016 Report Card on State Price Transparency Laws shows that price transparency—an obvious expectation integrated into every other consumer experience—is on the minds of state legislators and other health care leaders throughout the U.S. It also highlights why this information is so critical to every health care consumer in every state; prices for routine and very common procedures can vary by more than 50 percent, even in the same geographical area, placing a potentially significant financial burden on individual consumers, a burden that can be avoided with robust health care price transparency. Thus, design and implementation of the legislation matter.

In fact, the potential for transparency to empower consumers, shift costs down, and raise quality rests entirely on the strength and comprehensiveness of each state law’s implementation. This is a perspective that is often lost in some of the research on the effectiveness of price transparency, even though no one should be surprised that weak resources yield poor results. Importantly, a very strong and thorough body of research demonstrates that consumers will seek lower-priced, high-quality providers when given the right information in the right format.

Many states may see low grades for themselves. However, in this report card, they also have a roadmap for improvement. It’s up to states to apply that roadmap to benefit from the desired and proven positive effects of price and quality transparency.

I am not as optimistic as the authors that price transparency solutions coupled with a growing army of ‘empowered patients‘ are sufficient to tame the rapacious appetite of a predominantly volume incentivized delivery system. Clearly this is a slog unlike any other industry re-tooling, re-invention or re-engineering challenge we’ve EVER faced in the United States. More will be revealed as we move from niche solutions (concierge medicine, direct practice, non-risk bearing ACOs or IDNs, or HMO-lite solutions, etc.) tweaking at the margins of the ecosystem dysfunction but delivering little by way of sustainable contribution.

As I was recently reminded by Dan Munro of a quote often mis-attributed to Winston Churchill:

The question is whether there is any reason to believe that such a new era [think value based healthcare driven by ’empowered patients’] may yet come to pass. If I am sanguine on this point, it is because of a conviction that men and nations do behave wisely once they have exhausted all other alternatives. Surely the other alternatives of war and belligerency [avoiding the inevitable path of risk assumption/integration] have now been exhausted. Abba Eban, June 1967

Bottom-line?

I see HMO’s 2.0 (global risk) in our future. There just isn’t anyway around it, though we’re trying our best to avoid the inevitable.

Your thoughts?

Accountable Care, ACO, Affordable Care Act

Those Failing CO-OPs: Implications for the ACA and its ACO Workhorse

August 1, 2016August 8, 2016 Admin

by Gregg A. Masters, MPH

As the battle for the hearts and minds of Americans relative to the Affordable Care Act (ACA) continues, and the tracking sentiment index waxes and wanes between ‘favorable’ and ‘unfavorable’ one front in particular seems to have a fair degree of utility with the narrative profferred by the ‘repeal and replace‘ crowd.

Consumer Operated and Oriented Plan (CO–OP) Program

Nested in Section 1322 of the Affordable Care Act (ACA), the ACA created the Consumer Operated and Oriented Plan Program (the CO–OP program):

‘to foster the creation of new consumer-governed, private, nonprofit health insurance issuers, known as ‘‘CO–OPs.’’ In addition to improving consumer choice and plan accountability, the CO–OP program also seeks to promote integrated models of care and enhance competition in the Affordable Insurance Exchanges established under sections 1311 and 1321 of the Affordable Care Act. The statute provides loans to capitalize eligible prospective CO–OPs with a goal of having at least one CO– OP in each State. The statute permits the funding of multiple CO–OPs in any State, provided that there is sufficient funding to capitalize at least one CO–OP in each State. Congress provided budget authority of $3.8 billion for the program’

For program details and background see the Notice of Proposed Rule Making (NPRM) here.

As fodder for the anti-ACA crowd, much of the recent headlines have rightfully focused on the problematic ‘failure‘ rate of many of these community based AND governed start-up health plans.

Just witness some of the associated reports recently in the news:

Lets underscore the fact that CO-OPs are de-facto start-up health plans – a problematic undertaking under ideal launch conditions. As any entrepreneur or VCs fueling their vision knows, there is a tender proof of business model period during which an entities’ expenses typically exceed their revenues as they build market share and compete for members or lives in the market where they operate.

The ‘break-even’ (B/E) formula is rather simple:

revenues – expenses + subsidies = profit (or for non-profit entities: surplus revenues over expenses)

While not a golden rule, the B/E crossover point is rarely (if ever) within the first 24 or even 36 months of a stand alone (vs. subsidiary) operations and wholly determined by local market conditions and competitive landscape. Whether capitalization is via private investment or as in the case of CO-OPs via Federal loans this start-up fragility can not be overstated.

The other consideration unique to the CO-OP Program is the locally brewed, governed and accountable nature imbued in the operating culture and mission of these entities.

When you layer in the well established actuarial dynamics of profit and loss cycles predictably inherent in health insurance industry including ALL managed care derivatives, the critical variable of timing of market entry may introduce a volatility factor over-expressed under the current market conditions the ACA has fostered.

In other words, start-up health plans take time to create the infrastructure (people, processes and culture) to market, retain, price and operate successfully under ideal let alone typical market conditions. When you add the disruptive conditions the ACA has created (see: ‘Risk Adjustment Gone Wrong‘) in the small group and individual markets via Federally Facilitated or State run health insurance exchanges that complexity, associated market share gain challenges and ‘volatility ratio‘ can only be expected to play an increasingly important role in the success or failure of the enterprise.

The HMO Act of 1973

There is precedent to perhaps gauge and contextually consider the relative success or failure of the CO-OP Program spawned by the ACA. When the managed care revolution was birthed by then Republican President Richard Nixon via the HMO Act of 1973 as a market driven solution to remedy the run away costs of healthcare, HMO’s were typically seeded as non-profit, community based AND governed risk bearing health plans with a principal mission to maintain the health and well being of its members.

HMO’s like the CO-OP program today received Federal support via start-up loans to manage through the typical B/E point associated with the start-up of a community based health plan vs. the typical indemnity based, fee for services insurance companies that dominated the market. The two exceptions to this rule where the non-profits licensed and operating under the Blue Cross and Blue Shield label and at least in California the Kasier Permanente Health Plan.

During the launch trajectory as then designated ‘alternative delivery systems‘ (ADS) HMO’s slowly gained share (both mind-share and members) and made their way out of California, though constrained by their non-profit nature and operating culture including the limited marketing upside of ‘staff’ or group model HMOs portrayed as second class medicine. In the 80s HMO’s went mainstream via the introduction of Independent Practice Associations (IPAs) and later ‘network models’ which attracted the independent private practice cohort into managed care if for no other reason than to defend against an emerging trend that could threaten their livelihood as more and more health benefit plans started to traffic patients to a contracted network of ‘participating providers’.

Shortly thereafter fueled by Wall Street the major health insurance companies went on a acquisition binge of these sleepy, capital constrained community based health plans. This consolidation orgy created a legal bonanza via a new industry of for-profit conversions of community based health plans, the behemoths of which included many of the Blue Cross/Blue Shield licensees. During the ‘urge to merge‘ imperative the seminal transaction was likely the for profit conversion of Blue Cross of California under the stewardship of health wonk Leonard Schaeffer (former Administrator of HCFA – the predecessor agency to CMS). Blue Cross of California was then to serve as the founding member of the for-profit WellPoint empire now re-branded and operating as Anthem, Inc.

As simple and narrow as HMO (alternative delivery system model) charge was then, it pales in comparison to the charge and expectations placed on the nascent and fragile CO-OP industry. Not only are CO-OPs to stand up entities that provides non-profit, community based alternatives in a competitively vetted, comparably priced tiered benefits package for exchange facilitated marketplaces, they are to do this while the hospital, physician and a health plan communities are rapidly consolidating to gain scale and thus pricing leverage.

Bottom Line

The health insurance industry is a complex and some would argue ‘protected‘ industry (see: McCarran–Ferguson Act) that challenges even best-of-breed leadership (Mark Bertolini, Bruce Broussard et al) to sustainably operate their business as profitable enterprises during the volume to value shift. Witness the ‘urge to merge‘ amidst the majors, i.e., Aetna’s proposed acquisition of Humana, and Anthem’s proposed acquisition of Cigna, both recently challenged by the Department of Justice, and both rationalized by the need for scale to achieve the operating results expected by their investors.

As to ACO implications, clearly there are some. It’s hard to predict the rate of legal and clinical integration and the seamless care coordination and commitment to quality envisioned by 2nd or 3rd generation ACOs (typically risk bearing) or any of their derivative plays as exchanges become the de-facto market place for small group and individual offerings, but the handwriting is clearly on the wall.

So as some of us point to the CO-OP failure rate as another example of ACA over-reach via fundamentally flawed legislation and thus cause for repeal or re-entrenchment from the law, it may be helpful to historically gauge the nature of their challenge AND the market conditions in which they operate. A little humility can go long way here.

Accountable Care, Affordable Care Act, health reform

The 2016 Medicare Trustees Report: One year closer to IPAB cuts?

June 23, 2016June 23, 2016 Admin

by Gregg A. Masters, MPH

From the relentless drone of ‘where are the jobs, Mr. President?’ to the misguided fear mongering of ‘death panels for Grandma’ administered by un-elected, faceless bureaucrats to the de facto death of American Democracy itself the attacks on the Affordable Care Act (ACA), flawed indeed as it is, is starting to log results, some of them are quite impressive as noted by a recent piece at Morning Consult titled: ‘Trustees: Medicare Savings Recommendations Forestalled’.

***View more details on Brookings.edu***

This morning Brookings in association with the American Enterprise Institute and the Schaeffer Initiative for Innovation in Health Policy at the University of Southern California hosted ‘The 2016 Medicare Trustees Report: One year closer to IPAB cuts?‘.

The event is summarized by its organizers as:

For most of the last five decades, the most-discussed finding by the Medicare trustees has been the insolvency date, when Medicare’s trust fund would no longer be able to pay all of the program’s costs. Last year’s report projected that the hospital insurance trust fund would be depleted by 2030 – just 14 years from now. The report also predicted a more immediate and controversial event: the Independent Payment Advisory Board (IPAB), famously nicknamed “death panels,” would be required to submit proposals to reduce Medicare spending in 2018, with the reductions taking place in 2019. Do we remain on this path to automatic Medicare cuts next year?

The American Enterprise Institute and the Schaeffer Initiative for Innovation in Health Policy, a collaboration between the USC Leonard D. Schaeffer Center for Health Policy & Economics and the Brookings Institution, hosted a discussion of the new 2016 trustees report on June 23. Medicare’s Chief Actuary Paul Spitalnic summarized the key findings followed by a panel of experts who discussed the potential consequences of the report for policy actions that might be taken to improve the program’s fiscal condition. You can join the conversation at #MedicareReport.

In the tsunami of misrepresentation and outright deception of the many moving parts of the ACA the ultimate barometer of success – at least from the health policy perspective – is the forecasted effect the law was to have on the U.S. Treasury, i.e., it will bankrupt the country and undermine the roots of our pluralistic healthcare ecosystem, replacing it with a ‘top down’ Government run Federal quagmire.

EDITOR’s NOTE: for the Acting CMS Administrator’s take on the Federally Faciliated and State Run ‘Marketplace’, check out Andy Slavitt’s recap via ‘Marketplace Year 3: Issuer Insights and Innovation (Part 3)‘.

Well the ACA results are in and the truth be told, while not a sealed trend (there are both headwinds and macroeconomic wildcards in the mix), the data is ‘encouraging‘.

Enjoy the audio!

Accountable Care, ACO, Affordable Care Act

Must listen JP Morgan Healthcare Conference Webcasts: @Centene

January 27, 2016February 5, 2016 Admin

by Gregg A. Masters, MPH

NOTE: This is second in a series of ‘Must listen’ webcasts produced at JP Morgan’s 34th Annual Healthcare Conference. The first focused on telehealth sector market leader Teladoc. For background and details on this august gathering, see ‘If It’s January, It’s JP Morgan Healthcare Conference‘. Remaining companies to detail as they represent important ‘bell weather’ insights relative to their respective sectors, include: Aetna, AthenaHealth, Centene, Genomic Health, Molina Health,Universal American, Tenet Health, as well as several from the ‘non-profit’ (tax exempt) sector including Baylor Scott and White.

Centene’s operations and strategy positioning insights are material on a number of levels including the ‘urge to merge’ in the HMO or managed care space, and the implications such continuing consolidation holds for movement towards clinical and financial integration in the provider space. Additionally as many predict the future viability of the Medicare Trust Fund may rely largely on the efficacy of how Part C stakeholders articulate a sustainable vision of Medicare Advantage program to extend and enhance the life cycle of the Medicare program itself.

For direct link to the JP Morgan Healthcare Conference, click here. For the associated Centene profile, click here, the deck here and webcast, here.

For two related pieces on navigating the ‘white waters’ of the market’s transformation from volume-to-value as well as the recent ‘collateral damage’ (aka data breach) of healthIT as central spine enabling the transformation, check out ‘Centene–Health Net Entity Could Be Medicaid Leader‘ and ‘Centene loses hard drives with health info on 950,000 beneficiaries, launches search‘, respectively.

Meanwhile, here are some slides which paint the picture both company and industry:

Edit

CMS Quality Measure Development Plan: A DRAFT

Centene:

http://jpmorgan.metameetings.com/confbook/healthcare16/company.php?company=CENTENE+Corporation&p=19768&special_list_title=

http://marketrealist.com/2015/07/centene-health-net-entity-medicaid-leader/

Affordable Care Act, digital health, telemedicine

Must listen JP Morgan Healthcare Conference Webcasts: Teladoc

January 25, 2016February 5, 2016 Admin

by Gregg A. Masters MPH

NOTE: This is one in a series of ‘Must listen’ webcasts produced at JP Morgan’s 34th Annual Healthcare Conference; for background and details, see ‘If It’s January, It’s JP Morgan Healthcare Conference‘. Remaining companies to detail as they represent important ‘bell weather’ insights relative to their respective sectors, include: Aetna, AthenaHealth, Centene, Genomic Health, Molina Health, Universal American, Tenet Health, as well as several from the ‘non-profit’ (tax exempt) sector including Baylor Scott and White.

While telemedicine has been around since the 1980s via traditional ‘pipe to pipe‘ bi-directional points of presence typically found in hospital or academic medical centers, today’s more ubiquitous web enabled presence further leveraged by smart phones and tablets, is an entirely different and new experience and opportunity.

Whether one focuses on telemedicine or the wider swath of ‘telehealth services‘, both the technology and the cast of characters advancing the scope and range of practice opportunities or the body of work establishing use cases and modeling best practices, this remains a fast moving and rapidly iterating ecosystem.

One of the trophy and arguably best-in-class players in the space with both market and mindshare that dwarfs the aggregate total of the remaining three (3) out of the top four (4) players is Teladoc, which according to it’s website is:

…the first and largest telehealth provider in the nation, founded in 2002.

With it’s 2015 IPO we are afforded certain insights enabled by the regulatory reporting process as well as the sometimes behaviorally ‘nuanced’ though strategically insightful ‘management reports of operations’ of publicly traded companies.

As the sole telemedicine or telehealth play with this public standing, this is Teladoc’s first year to report out their experience as well as the issues, obstacles and opportunities it’s management sees for 2016 and beyond.

For context from Teledoc’s Chief Medical Officer Henry DePhillips, MD recorded at the American Telemedicine Association in Los Angeles in 2015, click here.

For direct link to the JP Morgan Healthcare Conference, click here. For the associated Teladoc deck and report narrative, click here.

Meanwhile, here are some slides which paint the picture both company and industry:

Basic Background on ACOs:

Data and Approach:

Question 1: How many ACOs came in under (or over) target?

Question 2: How much did the winners save – and how much did the losers lose?

Number (%)

Number of Beneficiaries

Total Savings (Losses)

Winners

203 (51.8%)

3,572,193

$1,568,222,249

Losers

189 (48.2%)

3,698,040

-$1,138,967,553

Total

392 (100%)

7,270,233

$429,254,696

Question 3: Did the winners spend less than the losers – or did they just have higher benchmarks to compare themselves against?

Per Capita Benchmark

Per Capita Actual Spending

Per Capita Savings (Losses)

Winners (n=203)

$10,580

$10,140

$439

Losers (n=189)

$9,601

$9,909

-$308

Total (n=392)

$10,082

$10,023

$59

Total Benchmarks

Total Actual Spending

Savings to CMS

Paid out in Shared Savings to ACOs

Net impact to CMS

Total (n=392)

$73,298 m

$72,868 m

$429 m

$645 m

-$116 m

Question #5: Are ACOs that have been in the program longer doing better?

Enrollment Year

Per Capita Benchmark

Per Capita Actual Spending

Per Capita Savings

Net Per Capita Savings (Including bonus payments)

2012

$10,394

$10,197

$197

$46

2013

$10,034

$10,009

$25

–$60

2014

$10,057

$10,086

-$29

-$83

2015

$9,772

$9,752

$19

-$33

Final Thoughts:

Consumer Directed Health Plans and the ‘Empowered Patient’ Mandate

Bottom-line?

Consumer Operated and Oriented Plan (CO–OP) Program

The HMO Act of 1973

Bottom Line

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