What If Everything You Are Doing About Physician Compensation Is Wrong?

Vision for Aligned Physician Compensation

Michael Connolly, DOSenior Vice President, Quality Management

Nevada Health CentersRobert Bauer

Senior Vice PresidentNavvis Healthways

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COMPENSATION V 1.0 FEE FOR SERVICE

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If It Isn’t Wrong, It’s Not Optimal

• Most physician compensation models are primarily productivity (wRVU) or cash collection based

• These fee for service models incent quantity over quality• If we do not FUNDAMENTALLY transform our system of

payment and compensation, we will continue to have:– Poor physician morale– Unsatisfactory experience: customer service and access– Slow progress towards a value-based system

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Are Current Compensation Models to Blame?

Physician Morale• According to a Wall Street

Journal survey of 12,000 physicians in 2012, only 6% described morale as positive• The greatest area of

dissatisfaction is not having enough time to spend with patients and feeling that they cannot meet patients’ needs.

• According to a 2014 Medscape/WebMD survey, only 46% would choose medicine as a career again and only 45% would encourage a younger person to enter medicine.

Patient Perception• Dissatisfied with access to

providers• Dissatisfied with communication

and follow-up by physicians• Generally confident in the quality

of their providers and care• Generally dissatisfied with

customer service and access to care

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Current Comp Models: Sustainable Results?

Hospital Owned Average Loss per Physician

Family Practice ($127,535)

Internal Medicine ($182,999)

Pediatrics ($24,882)

Source: 2012 MGMA Cost Survey Data

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Are You Really Patient Centered?

• Most health systems prominently state their desire to be patient centered.

• Are you patient centered if you:– Pay physicians based on volume instead of quality?– Do not provide multiple venues of access?– Do not provide care when the patient wants it?– Do not have a system that enables a physician

to spend meaningful time with patients?

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Is Compensation Aligned with the Triple Aim?

IMPROVING THE PATIENT

EXPERIENCE OF CARE

IMPROVING THE

HEALTH OF POPULATIO

NS

REDUCING THE PER CAPITA

COST OF HEALTH

CARE

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What Does FFS Incent?  V 1.0 (FFS)Productivity  Office Based Visit Volume YesPanel Size NoPatient Satisfaction  Time with Provider NoEasy Access NoChronic Condition Management NoCommunication with Provider NoPhysician Satisfaction  Satisfaction with Job NoTop of License Practice NoProfessional Pride NoQuality  Reward for Quality NoAccess  Non-Visit Based Care Incentive NoExtended Hours Incentive NoPopulation Focused  Coordinated Care NoDisease Management Focused NoEfficiency  Total Cost of Care NoOffice Staff Efficiency No

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Relationship of FFS to the Triple Aim

IMPROVING THE PATIENT

EXPERIENCE OF CARE

IMPROVING THE

HEALTH OF POPULATIO

NS

REDUCING THE PER CAPITA

COST OF HEALTH

CARE

V 1.0 FFS

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Shift From Volume To Value: The Train Has Left The Station

• In January, 2015 the Department of Health and Human Services announced performance goals and timelines for the transition of Medicare payments from volume to value.

• They also introduced a partnership to encourage private payers, employers, hospitals and physicians to adopt similar goals.

“We are dedicated to using incentives for higher-value care, fostering greater integration and

coordination of care and attention to population health, and providing access to information that

can enable clinicians and patients to make better-informed choices.” – Sylvia Burwell, HHS

Secretary

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CMS Provider Payment Reform Goals

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COMPENSATION V 2.0 FEE FOR SERVICE + PAY FOR QUALITY

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Typical P4Q Constructs

• Process measures have evolved to performance measures• Typical rewards based on:

– Preventive measures– Chronic disease measures– Generic drug utilization– Off-hours care – Decreased ER visits– Decreased admissions/readmissions

Can be PCMH based, which does emphasize care coordination.

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Challenges with P4Q

• # measures; generally too many– Peanuts effect

• Different measures for different payors• Physician line of sight and involvement in negotiating• IT systems to prompt closing gaps in care • Workflow for non physician providers and staff

– Standing orders– Incentives for staff

• Transparency and reporting to physicians: clinical and financial

• System and culture of accountability

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Challenges with P4Q

• Lack of alignment between comp model and P4Q programs– Are P4Q incentives passed directly to the physician?– In whole or in part?

• Timing and form of reward: not just about remuneration• Reward and recognition issues:

– Included in normal pay?– Paid periodically and in special setting?

• Quarterly quality meeting?– Special recognition and designation for high performance?

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Challenges with P4Q

• Undercuts the intrinsic professional and moral responsibility to provide high quality care into an economic transaction.

• Addressing a problem; not fixing the system.

A band aid at best.

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What Does FFS + P4Q Incent?  V 1.0 (FFS)Productivity  Office Based Visit Volume YesPanel Size NoPatient Satisfaction  Time with Provider NoEasy Access NoChronic Condition Management NoCommunication with Provider NoPhysician Satisfaction  Satisfaction with Job NoTop of License Practice NoProfessional Pride NoQuality  Reward for Quality NoAccess  Non-Visit Based Care Incentive NoExtended Hours Incentive NoPopulation Focused  Coordinated Care NoDisease Management Focused NoEfficiency  Total Cost of Care NoOffice Staff Efficiency No

V 2.0 (FFS + P4Q, PCMH) 

YesNo

NoNo

MaybeNo

No

SomeNo

Yes

NoNo

SomeSome

No

Maybe

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Relationship of FFS+P4Q to the Triple Aim

IMPROVING THE PATIENT

EXPERIENCE OF CARE

IMPROVING THE

HEALTH OF POPULATIO

NS

REDUCING THE PER CAPITA

COST OF HEALTH

CARE

V 1.0 FFS

V 2.0 FFS

+P4Q, PCMH

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COMPENSATION V 3.0 IT’S THE ALIGNMENT ………

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What Patients Really Want From Healthcare

PATIENT WANTS CURRENT REALITY

Restoring health when illThis is what our health system is built around

Reassurance and hope of options, even in dire circumstances

Our system has the most readily available treatment options

Highly qualified providersMost extensive system of medical education in the world

Maintain wellness Not a focus

Immediate availabilityNot current reality; Access is the new black

Ease of communication and follow-up after visits Severely lacking

Source: Detsky AS. What Patients Really Want From Health Care. JAMA. 2011;306(22):2500-2501. doi:10.1001/jama.2011.1819.

F

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Meeting Patient Needs: How We’re Doing

Prevention & Well-Being

Acute/Episodic Care

Chronic Disease

Management

Advanced Care

Current Payment & Delivery System

• Preventive care• Community based

services and infrastructure to address upstream determinants of health & well-being

• Care coordination• Regular access to

provider team• Medication

adherence• Lifestyle

modifications• Behavioral health

• Care as needed• Coordination across

providers and facilities

• Follow-up and prevention of recurrence

• Advanced care planning

• Supportive care – patient and family

• Timely hospice referral

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Access is the “New Black”

• Access– Access does not need to be in the form of an appointment with a

physician– True open access: today, tomorrow, evening, weekend

• In-person• Email• Phone• Tele visits• Text

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Communication And Follow-Up

50% of patients report no follow-up at all after a visit. Only 5% of patients report not wanting any follow-up

43% of patients prefer to be contacted by phone

25% of patients prefer to be contacted by Email

50% of patients report not knowing if their physician has a portal. Only 9% of patients report using a patient portal at any time in the past

96% of physicians view medication adherence as very important but less than half include adherence counseling when prescribing a new medication

Source: http://technologyadvice.com/medical/blog/study-patient-portal-communication-2014/ https://healthprize.com/wp-content/uploads/2015/02/Doc-Survey-Release_FINAL.pdf

Rapid communication and preferred

method of communication

are highly important to

patients

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Not Currently Paid For Or Incentivized Under FFS

• Phone management• Tele-health visits• Emails• Texts• Patient navigators• Patient portal and supporting technology (except via MU and

some PCMH contracts)

DIFFICULT TO ALIGN INCENTIVES OF PHYSICIANS AND PATIENTS WITHOUT THESE

COMPONENTS

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What We Need: A Transformational Payment Model

Prevention andWell-Being

Acute/EpisodicCare

Chronic DiseaseManagement

AdvancedCare

System That Meets All Members’ Health And Healthcare Needs

Current Payment And Delivery System

Prevention andWell-Being

Acute/EpisodicCare

Chronic DiseaseManagement

AdvancedCare

Next Generation Physician Compensation Model Goal: To design and implement a transformational, member-centered payment model for providers that encourages high-quality, coordinated care, patient

engagement and a focus on well-being and prevention, and bends the cost growth curve.

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This Transformational Model…

Is designed to meet member needs

Embraces health and healthcare needs

Recognizes socio-economic status

Pays for outcomes and value

Incorporates behavioral economics

Is not fee-for-service driven

REPRESENTS AN EVOLUTION FROM A TRANSACTIONAL RELATIONSHIP TO A VALUE-BASED COMPACT

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The Transformational Payment Model

• Physicians receive a core patient management fee, PMPY/PMPM:– Management fee based on:

• Number of attributed patients• Adjusted for age, gender, disease burden

– Incentive compensation• Patient satisfaction• Outcome measures

– ER visits, admissions, clinical measures, wellness measures• Adherence to evidence-based guidelines• Total Cost of Care

– Capitation model with a difference!

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How to get from here to there…..

• Payer contracts must be restructured:– Minimum Required Change: Convert historic FFS PCP payments into

a guaranteed base capitation• Need adjustments for changes to attributed members

– More aggressive change: Convert entire contract to a global cap• Need specific strategies and infrastructure for success

• Creating aligned compensation model– PCP compensation model is converted to a PMPM management fee– Protection for transition periods– The right performance metrics – Ecosystem of care support

Caution: Not for the faint of heart!

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Case Study for Payment Transformation

HMSA (Blue Cross of Hawaii)

Premise: FFS payment model is major contributor to unsustainable growth in health care costs.

Solution: Totally eliminate FFS payments for all PCPs.

Specifics:• Current FFS payments and % of PCMH $s rolled into a cap

payment level• In office visits with a physician no longer core to patient access

• Protection for transition year• Specific performance measures to protect against

disadvantages of a cap model

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Incentive Measures

• Principles– Focus on outcomes and value vs. process measures

– Manageable number

– Meaningful to both the physician and the patient

– Clinical goals evidence-based with built-in clinical support via the EHR

– Pay for improvement

– Checks and balances for cost, quality, and access

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Sample Primary Care Performance MetricsDOMAIN MEASURE(S)

1 PreventionAge and gender appropriate cancer screenings bundle: - Breast, Colon, Cervical

2 Prevention Flu and pneumonia vaccine bundle

3 Behavioral Health Screening for clinical depression and anxiety (PHQ4)

4 Population Management (Well-being)

BMI control/obesity - all members

5Population Management (Well-being)

WB5 completion rate

6 Patient Experience- Patient-reported satisfaction or PCP rating - Patient-reported access to care

7 Shared Decision Making Patient-reported SDM measure

8 Patient Experience/SDM Advance Care Planning

9 Chronic Condition Management

Diabetes Care Management bundle: - HbA1c Control - Eye Exam - Medical Attention for Nephropathy - Blood Pressure Control

10 Population Management (well-being)

Smoking cessation & follow-up

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Key Success Factors

ENGAGE • Incentivize financially

ENABLE• Information (business intelligence platform)

– provide real time data and analytics

EMPOWER • Ecosystem/Infrastructure

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Individual Physician Payment Illustration

PMPM $Per-member-

per-month base

Engagement $ and Triggers

Performance improvement -based $ and Triggers

Total potential primary care compensation

TCOC bonus

Current PCP FFS and PCMH reimbursement

80% 20%

Performance Incentive

25%Shared Savings

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Evolution of Compensation  V 1.0 (FFS)Productivity  Office Based Visit Volume YesPanel Size NoPatient Satisfaction  Time with Provider NoEasy Access NoChronic Condition Management NoCommunication with Provider NoPhysician Satisfaction  Satisfaction with Job NoTop of License Practice NoProfessional Pride NoQuality  Reward for Quality NoAccess  Non-Visit Based Care Incentive NoExtended Hours Incentive NoPopulation Focused  Coordinated Care NoDisease Management Focused NoEfficiency  Total Cost of Care NoOffice Staff Efficiency No

V 2.0 (FFS + P4Q, PCMH) YesNo NoNo

MaybeNo NoSomeNo Yes NoNo 

SomeSome No

Maybe

V 3.0 (Population Health) 

NoYes

YesYesYesYes

YesYesYes

Yes

YesYes

YesYes

YesYes

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Evolution of Compensation  V 1.0 (FFS)Productivity  Office Based Visit Volume YesPanel Size NoPatient Satisfaction  Time with Provider NoEasy Access NoChronic Condition Management NoCommunication with Provider NoPhysician Satisfaction  Satisfaction with Job NoTop of License Practice NoProfessional Pride NoQuality  Reward for Quality NoAccess  Non-Visit Based Care Incentive NoExtended Hours Incentive NoPopulation Focused  Coordinated Care NoDisease Management Focused NoEfficiency  Total Cost of Care NoOffice Staff Efficiency No

V 2.0 (FFS + P4Q, PCMH) YesNo NoNo

MaybeNo NoSomeNo Yes NoNo 

SomeSome No

Maybe

V 3.0 (Population Health) 

NoYes

YesYesYesYes

YesYesYes

Yes

YesYes

YesYes

YesYes

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Aligned Compensation Model & the Triple Aim

IMPROVING THE PATIENT

EXPERIENCE OF CARE

IMPROVING THE

HEALTH OF POPULATIO

NS

REDUCING THE PER CAPITA

COST OF HEALTH

CARE

V 1.0 FFS

V 3.0 Population

Health

V 2.0 FFS

+P4Q, PCMH

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Summary• Our current compensation models:

– do not support the move to population health

– Are inconsistent with the triple aim

• Current models do not meet the needs of either physicians or patients;

• The current model drives unprofitable volume:– Physicians spend too much time on unnecessary visits– Do not practice at the top of their license

• Our failure to meet member needs, especially related to Access, is evidenced by the growth of disruptive competitors;

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Michael J. Connolly, DO

Dr. Connolly is the Sr. VP for Quality Management at Nevada Health Centers based in Las Vegas, Nevada. Prior to joining Nevada Health Centers Dr. Connolly served as the Chief Medical Officer for Carondelet Medical Group (CMG) in Tucson, Arizona. He has extensive experience in practice operations, physician compensation, contracting, chronic disease management, and value based purchasing. He remains an active clinician with a primary care practice.

Dr. Connolly’s formal training includes a fellowship in Geriatric Medicine at SUNY Stony Brook and a residency in Internal Medicine at Yale University. He has worked in a wide variety of clinical and administrative environments, including academic positions at SUNY Stony Brook and clinical positions with the US Indian Health Service on the San Carlos Apache Indian Reservation.

While working with the Indian Health Service he recognized the need for a coordinated team approach to the management of Diabetes. He developed the San Carlos interdisciplinary Diabetes team that ultimately led to one of the Indian Health Services first ADA recognized Diabetes care programs. He has continued to work extensively in the Diabetes arena and has developed clinical programs that have been featured by The Health Care Advisory Boards publications as one of the nation’s most successful and innovative approaches to Diabetes care and reimbursement.

Dr. Connolly has served on the Pima County Medical Society’s Board of Directors. He was also the chairperson for the Quality Committee of Mercy care plan, Arizona’s largest and highest clinically rated Medicaid plan. He also served on Mercy care Plans Board of Directors. Dr. Connolly has received multiple awards for excellence and compassion in patient care.

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Robert Bauer

Bob Bauer is a Senior Vice President for Navvis Healthways, a boutique consulting firm that specializes in payment transformation and the strategic evolution to Population Health Management. He has over 30 years of consulting and executive leadership experience in the health care industry. He has served as the V.P. Finance/CFO for community, multi-hospital, teaching and faith based health systems. Bob is known for his strategic approach to financial leadership and has led numerous acquisition, affiliation and financing transactions.

Bob has extensive experience in PHO and integrated health system development. He implemented a Core Competency Development Process to accelerate physician leadership development. He has served as Sr. Vice President/COO for a network of ten hospitals and their respective PHOs or IPAs involved in risk based managed care contracting. Bob is also an innovator in ambulatory care strategies. He created the nationally recognized Health and Wellness Center by Doylestown Hospital, an experientially designed comprehensive outpatient campus.

Bob graduated from Villanova University with a Bachelor of Science degree in accounting. He is a member of the Healthcare Financial Management Association and the Pennsylvania Institute of Certified Public Accountants, where he has served on the statewide Health Care Committee.