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Healthcare Reform And Disruptive Innovation - ACMHA

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					                                    www.The NationalCounc il.org




Healthcare Reform &
Disruptive Innovation
      Oxymoron or
     We Told You So?

Charles Ingoglia, Vice President,
Public Policy, National Council
Dale Jarvis, Managing Consultant,
Dale Jarvis and Associates
                                               www.The NationalCounc il.org




    Last Year at the ACMHA Summit
    we predicted the following…
    > Federal Healthcare reform will trigger
      dramatic changes in how health and
      behavioral health services are
      organized and funded
    > These changes will create a tipping
      point in how the healthcare needs of
      persons with serious mental illness
      and the behavioral healthcare needs
      of all Americans are addressed


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    If you read the newspapers and
    blogs you would think we blew it with our
    predictions




                                One in Five think the ACA has
                                been Repealed; Another Quarter
                                not Sure
                                KFF Health Tracking Poll,
                                February 2011

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    This Year We’d Like to Suggest the
    Following…
    > Change is coming to every corner of the
      healthcare ecosystem but change does
      not always equal improvement
    > The result will be:
       • True Disruptive Innovations,
       • Sustaining Innovations, and
       • Disruptive De-evolution
    > Depending on which state and which
      part of the ecosystem you’re in

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    We also Think…

    > An epic battle is
      unfolding between
      centers of power
      that benefit from a
      sick care system
       and
    > Those that see a competitive
      advantage in creating a true health care system


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    Diagramming the Epic Battle
                                         Current Resource Allocation
    It’s all about Inverting the
    Resource Allocation Triangle           All things Inpatient and
    so that:                                      Institutional
    > Prevention Activities are
         funded and widely deployed
    > Primary Care budgets in U.S.               Prevention,
                                                                      Inpatient &
                                                  Primary
         are doubled                                Care,
                                                                      Institutional
    > Mental Health and                              BH
         Substance Use Disorder                                 Prevention, Early
         Services are available to all                             Intervention,
    In order to Decrease Demand in                              Primary Care, and
                                                                Behavioral Health
    the High Cost Specialty and
    Acute Care Systems
                                                          Needed Resource Allocation

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    Question 1: Who’s going to win this Epic
    Battle (e.g. will healthcare reform really
    change healthcare from a sick care system
    to a true health care system)?




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          Chuck and Dale’s Thought Process:
          The U.S. Quality and Cost Problems
                                                                                                           110 Preventable Deaths per
               Preventable Deaths* per 100,000 Population
                 in 2002-2003 (19 Industrialized Nations,

                                                                                                                    100,000
                          Commonwealth Fund)
          (* by conditions such as diabetes, epilepsy, stroke, influenza,
              ulcers, pneumonia, infant mortality and appendicitis)
                                                                                            110                            Per Capital Health Expenditures, 2007 (US $)
    110                                                                                                                 18 Industrialized Nations, OECD Health Data, 2010
                                                                              103 103 104
                                                                        101                                           Note: US Spending is 52% above Norway and 88% above Cana
    100                                                            96
                                                              93                                  $8,000
                                                         90                                                                                                               $7,285
    90                                                                                            $7,000
                                                 84 84
                                         82 82
                                    80                                                            $6,000
    80                         77
                       74 74                                                                                                                                          $4,791
               71 71                                                                              $5,000
                                                                                                                                                               $3,853
    70    65                                                                                                                          $3,349 $3,361 $3,593 $3,792 $3,867
                                                                                                  $4,000                       $2,900     $3,353 $3,540 $3,619
                                                                                                                  $2,687
                                                                                                             $2,658       $2,729 $2,990
    60                                                                                            $3,000 $2,471       $2,701

                                                                                                  $2,000

                                                                                                  $1,000

                                                                                                     $0


               $7,285 Per Capita Health
                     Expenditure
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      Our Prediction... The Winners Will Be…

    > The American Public and
      American Business
    > Because there are more
      heavyweights being hurt
      by a sick care system than
      benefiting and our belief
      that when “disruptive
      innovation” gets rolling in
      an industry, you can slow
      it down but not stop it



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     Question 2: If healthcare reform results in
     the shift from a sick care system to a health
     care system, how will this affect Americans
     with mental health and substance use
     conditions and the organizations that serve
     them?




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     The Two-Part Problem is Closely
     Linked to a Third Problem
     > Americans with a Serious Mental Illness die, on the average, at
       age 53
     > The high prevalence combined with high cost for persons with
       Behavioral Health disorders, directly affect the quality and cost
       problems




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     Our Prediction…
     > If the balance of power shifts in the way we predict, this will
       accelerate:
        • A growing awareness of the prevalence of MH/SU disorders and
           the cost of not providing effective treatment and supports,
        • Combined with parity and the increased risk accompanying near
           universal coverage for the safety net population,
        • Combined with the an awareness that:                        Triple Aim
             • Behavioral Health is necessary for Health         Better Health for the
             • Prevention is Effective                           Population, Better
             • Treatment Works                                   Care for Individuals,
             • People Recover                                    Reduced Costs
     > Resulting in recognition that we cannot achieve the Triple Aim
       without addressing the health care needs of persons with a SMI
       and the MH/SU needs of all.
     > This is already happening throughout the U.S.

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     Question 3: What does Disruptive Innovation
     have to do with all this, especially for the
     behavioral health community?




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     Let’s Start with the Definition
     of Disruptive Innovation
     > Clayton Christensen suggest that problems facing the American
       health care system mirror nearly every other industry in their early
       phases.
     > Products and services in new industries “are so complicated and
       expensive that only people with a lot of money can afford them and
       only people with a lot of expertise can provide or use them.”
     > Historically, this phase has been followed by the advent of new
       methods of production and distribution that disrupt the status quo and
       result in goods or services that are more affordable and widely
       available to the general public.
     > Often accompanied by disruptive innovator companies that become
       the new market leaders, replacing the old guard.


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     And Definitions of Sustaining
     Innovation and Disruptive De-Evolution
     > In contrast, a given business sector that has not yet been disrupted produces
       a particular set of complicated and expensive products or services for a very
       limited market; think of the mainframe computer or the multi-specialty general
       hospital.
     > Over time improvements are made in those products or services as the
       leading companies compete for business; think of IBM competing with
       Burroughs and UNIVAC; or the Mayo Clinic’s Centers of Excellence).
     > These improvements include refinements in how the product or service is
       created to increase quality and reduce costs. The most significant
       improvements almost always made by industry leaders are called Sustaining
       Innovations (as distinguished from Disruptive Innovations).
     > We define Disruptive De-Evolution as an ill conceived change process that
       results in moving backwards, not forwards. E.g. the Anti-Triple Aim: Poorer
       Health for the Population, Worse Care for Individuals, Higher Costs.

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         We want to explore change
         that is occurring in six states

     >   New York Medicaid Redesign >   And help generate a
     >   Vermont Blueprint for Health   discussion about whether
     >   Massachusetts Payment Reform   these changes represent:
     >   Oregon Transformation Team      • True Disruptive
                                           Innovations,
     >   Colorado Medicaid ACOs
                                         • Sustaining Innovations,
     >   Washington State Regional
                                           or
         Health Authorities
                                         • Disruptive De-Evolution


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     What all six have in common…

     > The head is being
       reconnected to the body
     > Through different
       approaches to primary
       care/behavioral health
       integration at the clinical,
       financial and structural
       levels
     > The Triple Aim is a key organizing principle

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     New York Medicaid Redesign
     > Proposal Title: To establish interim behavioral health
       organizations to manage carved-out
       behavioral health services while moving
       toward integrated care financing and
       delivery models.

     > Brief Proposal Description: Bringing in Behavioral
       Health Organizations (BHOs) to manage behavioral health
       services that are currently paid for via unmanaged fee for
       service reimbursements and not otherwise covered under
       the state's various Medicaid Managed Care (MMC) plans.


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     Vermont Blueprint for Health

     > Began with
       clinical redesign
       in 2007
     > Followed by
       ACO Pilots in
       2008




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     Vermont Blueprint for Health
     > Three Single Payor Proposals Put Forward in 2011:
        • Cover remaining 32,000 uninsured Vermonters
        • Bring all Vermonters up to standard, essential benefit package
        • Finance by a payroll contribution, with exemption for low wage
          employers and workers
     > Anticipated Financial Results:




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        Massachusetts Payment Reform




     > Recently, Governor Patrick filed HD 3590, An Act
       Improving the Quality of Health Care and Controlling
       Costs by Reforming Health Systems and Payments.
     Proposal to radically restructure the delivery system
     and behavioral health included in meaningful ways.

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                                                                                 www.The NationalCounc il.org




           Massachusetts Payment Reform
     > 9-member behavioral health task force to make
       recommendations on:
        • The most effective and appropriate approach to including
          behavioral health services in the array of services provided by
          Accountable Care Organizations (ACOs);
        • How current reimbursement methods and covered behavioral
          health benefits may need to be
          modified to achieve more cost
                                                                              Health   Plan
                                                  Health      Plan                                          Health   Plan



          effective, integrated and high
                                                                      Accountable Care Organization

          quality behavioral health                Clinic
                                                  Food Mart




          outcomes; and,                      Specialty Clinics
                                                   Clinic
                                                  Food Mart

                                                                              Health
                                                                     Health   Homes     Health        Hospitals      Hospitals
                                              Specialty Clinics      Homes              Homes




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            Massachusetts Payment Reform
     > The extent to which and how payment for behavioral health
       services should be included under alternative payment methods
       established or regulated under this legislation.
     > Provision of a transition period from a fee-for-service delivery
       model to a payment system that incorporates alternative
       payment methodologies, including global payments. The goal is
       to transition to alternative payment methodologies by 2015.
       Publically funded programs, including MassHealth,
       Commonwealth Care, and Commonwealth Choice will
       implement alternative payment
       methodologies and use integrated
       care organizations and ACOs by
       January 1, 2014.


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     Oregon Transformation Team




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          Colorado Medicaid ACO Implementation
     Seven Regional Care Coordination Organizations will provide:
        • Medical management, particularly for medically and behaviorally
          complex clients, to ensure they get the right care, at the right time
          and in the right setting;
        • Care-coordination among providers and with other services such as
          behavioral health, long-term care, SEP programs and other
          government social services such as food, transportation and
          nutrition; and
        • Provider support to include assistance
          with care-coordination, referrals,
          clinical performance and practice
          improvement and redesign.




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     Washington Regional
     Health Authorities
     Current “Wiring Diagram”




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     But What About ACOs for Persons
     in the Safety Net Population?
                                      Accountable Care Organization
                                           Accountable Care Organization

                     Clinic
                    Food Mart




          Medical Specialty Clinic
                     Clinic
                    Food Mart
                                               Health           Health
                                                Home            Home
                                                               (MH/SU              Hospital
                                              (PC Clinic                                        Hospital
          MH/SU Specialty Clinic              with MH/          Agency
                                                 SU)           with PC)



        Social Service          Employment,Education       Public Health,Housing      Oral Health, Long
          Agencies                                                                     Term Care, etc.
                                       Healthcare Neighborhood


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                                         Regional Healthcare Authority
                                                                             Community Planning


     Key WA Idea
                                                                                  Group
                                     Health Planning


                                                             Regional Health Authority
     Promote two organizing          Funding
                                                                                           County          RSNs
     efforts:                                                  Health Plans
                                                                                           and
                                                                                           Tribal
                                                                                           Services
     > Organizing the delivery
        system to create             Management
        accountable systems of
        care                                               Accountable Care Organizations
                                                            Clinic
                                                           Food Mart



     > Organizing the payors of                        Specialty Clinics

        all safety net services to                          Clinic
                                                           Food Mart
                                                                              Person   Person
                                                                             Centered Centered    Hospitals
                                     Delivery
        create a supportive          System
                                                       Specialty Clinics
                                                                              Health
                                                                               Care
                                                                              Homes
                                                                                       Health
                                                                                        Care
                                                                                       Homes
                                                                                                                Hospitals



        payment and regulatory
                                                                       Social Service                 Employment/

        system                                                           Agencies                      Education



                                                              Housing                      Public Health Etc.




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     Final Thoughts on the
     Implications for Behavioral Health
     > We guarantee we are all moving into a period of disruption
     > This is going to be hard stuff
     > Behavioral Health won’t automatically be included
     > BH stakeholders need to develop the value proposition
     > And we will likely have to ask to be involved
     > This will require thinking and acting differently
     > And what unfolds will depend, to a large degree, on what
       the people in this room do over the next 18 months

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