2016-08-17 12:07:56 UTC

Cost of Population Health Model Development in a Medical Practice

Aug. 22, 2016

Dr. Larry Kosinski shares an example of how alternative payment models can benefit both providers and their patients.

Lawrence R. Kosinski, MD, MBA, AGAF
AGA Institute Practice Councillor; Illinois Gastroenterology Group, Elgin, IL 
On May 9, 2016, CMS published a proposed rule that provides details on the implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Key features of this law include: the Merit-based Incentive Payment System (MIPS), which would apply to all eligible clinicians that Medicare pays under the Physician Fee Schedule (PFS), as well as the incentives for these clinicians to participate in advanced Alternative Payment Models (APMs).
To qualify for incentive payments, clinicians would have to receive enough of their payments or see enough of their patients through advanced APMs. Under the new law, advanced APMs are the CMS Innovation Center Models, Shared Savings Program tracks, or statutorily-required demonstrations under which clinicians accept both risk and reward for providing coordinated, high-quality and efficient care. These models must also meet criteria for payment based on quality measurement and for the use of EHRs.
Each GI practice must ask the following questions:
  • Do you have the people, processes and technology in place to accurately collect and report data on MIPS? 
  • What do you need to do now to prepare for pursuing an advanced APM?
Although most GI practices will be forced to report through MIPS, there is no reason that they can’t begin developing the infrastructure for an APM.
The Illinois Gastroenterology Group (IGG) is doing just that. IGG is one of the first GI practices in the U.S. to develop and sustain a successful Intensive Medical Home (Project Sonar)1,2,3, which can be viewed as an intermediate step towards an advanced APM. Project Sonar was developed as a joint venture with BlueCross BlueShield of Illinois (BCBS IL) and is focused on patients with IBD. We now have two years of experience managing this initiative. We presented our first full year of data at Digestive Disease Week® (DDW), where we demonstrated a 9.8 percent decrease in the total cost of care for patients with Crohn’s disease along with a decrease in emergency room visits and inpatient hospitalizations.
The infrastructure that we developed for Project Sonar is what is needed for a population health project, including:
  • People: A team of nurse care managers (NCMs) was deployed in our practice. We did not hire new nurses; instead we repurposed existing staff to fulfill this function. In addition to the NCMs, an IGG-wide administrative position was created to coordinate the patient engagement data. Our group has six business units and each of the practices designated a physician medical director responsible for Project Sonar, which is a paid position.
  • Processes: A major shift is necessary to move from the “one patient at a time” approach to a population health-based approach. This requires a focus on your entire population of IBD patients. Policies and procedures must be set in place accordingly. Each of our Project Sonar Intensive Medical Home (IMH) patients must be “touched” at least once a month, either through a visit, procedure, infusion session, phone call or virtual interaction.
  • Technology: Conventional electronic medical records (EMRs) do not possess the population-based templates necessary to manage patients in an IMH. We needed to create Clinical Decision Support Tools (CDS) to provide our physicians and mid-levels with evidence-based fields for the management of the IMH patients. Although our EMR allowed for these custom CDS tools, most do not. For patient communication, we cannot totally rely on our NCMs, but must seek out technological solutions. For most practices this is accomplished with a patient portal. Most portals lack the ability to efficiently send and receive structured data populations of patients, and alternative platforms are being developed to fill this void.4
  • Engagement: It’s not just enough to identify patients who are potentially at risk. As noted above, we needed to develop a platform that would “ping” all patients with Crohn’s disease on a monthly basis. Using a consistent and validated set of questions, we ask patients each month how they are doing. We developed an algorithm to identify patients who were doing well and those who were at risk. The feedback from these encounters must be coordinated and acted upon. When patients at risk are identified, follow up by the NCM must promptly occur.
What does this all cost? The most significant expense in any medical practice is personnel. An IMH is no exception. Initially, our team of NCMs totally consumed any surplus revenue that we had received from the payor, where each NCM was spending 50 percent or more of their time managing 50 IMH patients. Once we deployed the patient engagement platform, and refined it based on feedback from patients, NCMs and physicians, this resulted in a very significant efficiency where our NCM can now manage over 100 patients using only 25 percent of their time, representing a 200-fold increase in efficiency. The technology platform is critical to the success of any population health initiative.
Following summarizes the current financial breakdown in a typical IMH for a population of 500 patients.
IMH Revenue Per Member, Per Month (PMPM) Payment
Typical Entry IMH Payment $50.00
IMH Expenses PMPM Expense
Clinical Expenses  
Medical directors $3.00
NCM director $2.67
NCMs $13.33
Total Clinical Costs $19.00
IT Expenses PMPM Expense
Project management $2.50
Patient engagement platform $12.00
Data Analytics $3.00
Total IT Expenses $17.50
Total IMH Expenses $36.50
Profit $13.50
Profit Percentage 27%

Thus, if costs can be controlled there is the potential for a 25-plus percent profit in an IMH program where everybody wins: patients, physicians and payors. 

We have entered the era of value-based payments and the management of risk. With the release of the U.S. Preventive Services Task Force recommendations on colorectal cancer screening, it is clear that the costs of various screening modalities will drive what entities at risk for populations will do, and that colonoscopy as the primary method for screening could be challenged. Accordingly, gastroenterologists must “pivot” in order to succeed in this new environment. This pivot will require us to revisit our people, processes and technology in order to survive. The game has changed and the rules are all developing. We can survive and thrive, but we must be innovative, embrace technology and engage patients in order to demonstrate our value. 
AGA can help you with strategies that will allow your practice to survive and thrive in the changing payment landscape. The Institute for Healthcare Improvement has published great background on making sense of population health.
1 AGA Perspectives: Aug/Sept 2015 
2 Endoeconomics: Fall 2015
3 HCSC Pulse: 3/4/16
4 Abstract: Project Sonar: Reduction in Cost of Care in an Attributed Cohort of Patients With Crohn's Disease Lawrence Kosinski, Joel V. Brill, Michael Sorensen, Charles Baum, Robin Turpin, Pamela Landsman - Blumberg

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