NYSOA Prospectus fall 2014

Volume 40 Number 3 2014

prospectus

The Future is Now

In The News

By Christopher Colburn, OD, FAAO NYSOA President CE-NY, a partnership between NYSOA and SUNY College of Optometry presented exceptionally high quality continuing education (CE) in Fairport, NY, on September 14th. The subject matter was so fresh that some of the published research hadn’t yet reached the in-boxes of research Christopher Colburn, outlet subscribers. CEOD, FAAO NY is a great example of what NYSOA is doing to keep you informed and on the cutting edge of eye care delivery. More importantly, the program focus was on targeted therapy of ocular disease, guided by genetics. It is, to say the least, fascinating and exciting. We can identify our patients that are most likely to progress to wet macular degeneration and determine what the best combination of nutrient therapy is to reduce the rate of progression. Consider also the possibility that the near horizon offers genetic modification to repair damaged retinal components. Some of these treatments will be provided by optometrists and some will be co-managed with our ophthalmic surgeon colleagues. Most certainly optometrists will be the main entry point for the majority of patients regardless of which practitioner is delivering the treatment. Early identification and intervention is paramount for genetic therapy and targeted

INSIDE THIS ISSUE

treatment to be successful. These are tremendous opportunities for the profession of optometry. It amplifies the importance that the scope of optometric practice remains broad. NYSOA continues to insure your ability to provide this and other necessary care to your patients.

NYSOA is also insuring that providing care to your patients remains a financially viable proposition. We are taking an aggressive stand with respect to third party payers mandating discounts on non-covered services. Many states are passing legislation to clarify the inappropriate nature of these insurer mandates. We believe New York law already forbids this manner of discounting and we will be providing clear guidance to our members in the near future.

New York is implementing a requirement that all prescriptions be electronically prescribed via an approved and encrypted system. Presumably, currently available e-prescribing systems will have capability of being compliant. NYSOA is engaged in discussions with the Department of Health to insure that the prescribing needs of optometrists and our patients are being met. There is some relevance to oral medication prescribing as well.

NYSOA members depending on our colleagues in ophthalmology to access oral medications are encouraged to discuss the complications that may arise with the new requirements.

Continued on page 2

Letter from the President.................................1

2014 PAC Contributors......................................9

Awards Committee Appointed...........................2

Clinical Transformation....................................11

What is an ACO?................................................5

Value-Based Reimbursement..........................13

Nominating Committee Appointed.....................7

November CE-NY.............................................17

2014 CVC Contributors......................................8

NYSOA Business Partners...............................19

Dr. Steven H Schwartz, OD has been reappointed to the American Optometric Association’s Accreditation Council on Optometric Education for the 2014-2015 administrative year.

Congratulations!

Congratulations to Dr. Alden Haffner, OD, FAAO, for his selection as the inaugural recipient of the American Academy of Optometry’s Henry B. Peters Memorial Award in Public Health and Environmental Vision.

Dr. Haffner will be honored at the Academy’s Annual Awards Ceremony on November 14th in Denver, Colorado.

Upcoming Events

October 17-18, 2014 Board and Society President Retreat, Rensselaerville, NY November 2, 2014 CE-NY, Skaneateles, NY

January 30 – February 1, 2015 Winterfest!

Prospectus (ISSN 1055-7407) is published by the New York State Optometric Association, Inc, 119 Washington Avenue, 2nd Floor, Albany, NY 12210 All issues are electronic Yearly subscriptions $2500, single copies $550 The views and opinions expressed are those of the signed author and in no way should be construed to reflect the opinions or position of the editorial staff of Prospectus, or the New York State Optometric Association, its officers, local affiliate societies, or administrative staff All submissions are subject to editorial change with regard to clarity or length Final decision regarding acceptance or rejection of any submission lies with the editor

2

Volume 40 Number 3 2014

Continued from page 1 The obvious solution is to pass legislation for optometrists to prescribe oral medications, which is a reminder that state-wide offices will be determined by election in November.

NYSOA anticipates that many opportunities will arise after the November elections. NYSOA PAC is aggressively supporting those candidates that support our profession. Personal relationships, however, are much more valuable than PAC donations. Please consider personal interaction with your local legislators. The more they know about you, your patients, and the practice of optometry, the easier it is for us to advocate on your behalf. Care models will change, payment methods will change, and how you provide care will change. In the end, however, your relationship with your patients will be the same.

There are many current challenges for optometry in New York and many on the horizon. The Officers and Trustees of the NYSOA are actively engaged in the long-term advancement of the profession and day to day management of urgent challenges facing our members Most importantly, however, our patients continue to receive exceptional care in the offices of NYSOA members across the state.

I considered whether that sentence should end with a period, a question mark, or an exclamation point. Have you reconciled with change over time, are you not sure sometimes, or do you fear for your livelihood on a daily basis. On days when I spend much time on the challenges facing doctors of optometry, I find myself considering the later of those states. Most days, however, the variable nature of our profession tends to provide stable comfort in the ability to adapt.

There are dramatic challenges on the horizon related to healthcare reform. A few examples are accountable care organizations, ICD10, and quality care initiatives. Sometimes these issues can be daunting, but mostly they are slow moving and have little impact on practicing optometry today or tomorrow. Other issues however can impact practice immediately. Representatives of Allergan alerted us recently that a health plan in New York had suddenly required consultations with ophthalmologists for the prescribing of Restasis. Our response was swift and the issue was resolved in short order. Through all these issues, our patients continue to receive exceptional care on a daily basis. The efforts of the NSYOA ensure that you, the doctor, decide what that relationship is. Vision therapy, specialty contact lenses, ocular disease management, refractive care, emerging technology, or whatever else a doctor of optometry finds relevant to his or her practice should be within your scope of practice. NYSOA serves to protect your scope of practice and as new technology and treatment options arise, they are available to you to use for the benefit of your patients.

Awards Committee Appointed for 2015 Make an eye-catching statement with bold, urban flair.

An assortment of radiant, color-blocking hues create an effervescent look, while the toneon-tone models offer a subtle, yet unforgettable presence.

NYSOA President Dr. Christopher Colburn has appointed an Awards Committee for 2015. The Committee is Chaired

by Dr. Jeffrey Calhoun, NYSOA Trustee, and includes Dr. Dan Kirchheimer, President of the South Central Optometric Society, Dr. Kristin Protosow, President of the Suffolk Optometric Society and Dr. Brian Powell, President of the Hudson Valley Optometric Society.

Categories for awards include:

•• Optometrist of the Year •• Young Optometrist of the Year •• Communications Award •• Optometric Educator Award •• Arthur Gottlieb Leadership Award •• Public Service Award

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The Committee is charged with the task of seeking candidates Award recipients will be recognized by the NYSOA in 2015.

3 Letter to Practitioners Regarding Electronic Prescribing Registration Dear Practitioner:

Effective March 27, 2013, amendments to Title 10 NYCRR Part 80 Rules and Regulations on Controlled Substances authorizes a practitioner in New York State to issue an electronic prescription for controlled substances in Schedules II through V. For electronic prescribing of controlled substances (EPCS), the regulations require a practitioner to register their certified electronic prescribing computer application with the New York State Department of Health, Bureau of Narcotic Enforcement (BNE).

To register your computer application with BNE, please complete the EPCS Registration form (www. health.ny.gov/forms/doh-5121.pdf) and email it to narcotic@health.state.ny.us with “Practitioner EPCS Registration” in the subject line.

Practitioners must also meet the federal security requirements for EPCS as detailed in the Drug Enforcement Administration’s Electronic Prescriptions for Controlled Substances Interim Final Rule.

Please note as of March 27, 2015*, electronic prescribing of controlled and non-controlled substances will be mandatory for practitioners, excluding veterinarians.

Questions regarding the EPCS registration form or process may be directed to BNE by emailing narcotic@health.state.ny.us or by calling 1-866-811-7957, Option 1.

Sincerely, Terence J. O’Leary Director Bureau of Narcotic Enforcement

*NOTE: For the time being, ODs will not have to register their software with BNE, but they will need encrypted software.

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Prospectus

New York State Optometric Association 119 Washington Avenue Second Floor Albany, NY 12210 P 800-342-9836 P 518-449-7300 F 518-514-1537 nysoa2020@gmail.com www.nysoa.org

NYSOA Elected Officers

President Christopher Colburn, OD, FAAO Jamestown, NY ccolburn@stnyrr.com President-Elect Michelle Lagana, OD Honeoye Falls, NY mlagana@bausch.com Vice President Dawn Chivers, OD Glens Falls, NY drchivers@drsklineandboyd.com Secretary/Treasurer Kenneth Sorkin, OD Plainview, NY sorkod@aol.com

2015

Immediate Past-President Susan Fisher, OD N Bellmore, NY sfisherod@aol.com

2015

2015

A Fun-Filled, Family-Friendly Weekend in Lake Placid!

Staff

Executive Director Jan S Dorman nysoa2020@gmail.com

Prospectus Editor-in-Chief Denise Whittam, OD denisewhittamod@webtv.net Prospectus Managing Editor Sarah Murphy nysoa2020@gmail.com Graphic Designer Josh Crystal jc@crystaljdesign.com

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5 What is an ACO? A Definitive Guide to Accountable Care Organizations

By Dr. John Haughom and Dr. David Burton

As the concept of healthcare value becomes more prominent, healthcare providers will increasingly need to focus on the whole patient or on populations of patients, encouraging and requiring teamwork among clinicians across specialties, as well as coordination among clinical care units and healthcare organizations of all types across the continuum of care (e.g., physician groups, hospitals, health systems, payers, and vendors). This will require all parties to relinquish their traditional siloed views and adopt a more expansive and collaborative model of care delivery — respecting the talent and experience brought to the table by all stakeholders. The need for this level of collaboration and coordination has led to the concept of the Accountable Care Organization (ACO). What is an ACO?

The Origin of Accountable Care Organizations

The term Accountable Care Organization was first coined in 2006 by Elliott Fisher, MD, Director of the Center for Health Policy Research at the Dartmouth Medical School. The ACO concept immediately sparked a great deal of interest and debate. Interest gained additional momentum in 2009 when the Affordable Care Act (ACA) used a specific CMS-drafted definition of an ACO. The following discussion focuses on the general ACO concept as defined by Fisher and others rather than the specific ACA definition.

The ACO concept is one that is still evolving, but it can be generically defined as a group of health care providers, potentially including doctors, hospitals, health plans and other health care constituents, who voluntarily come together to provide coordinated high-quality care to populations of patients. The goal of coordinated care provided by an ACO is to ensure that patients and populations — especially the chronically ill — get the right care, at the right time and without harm, while avoiding care that has no proven benefit or represents an unnecessary duplication of services.

Payment Models for ACOs

An ACO may use a range of payment models (e.g., fee for service — with or without shared savings arrangements, capitation for specific defined populations (e.g., diabetes), or global capitation — based on a payment per person, rather than a payment per service provided, etc.). The traditional transaction-based payment model does not provide the incentives required to support ACOs and population health. As the reimbursement model migrates toward payment for value, this will change. It is anticipated that ACOs will increasingly be reimbursed under a capitated model that incentivizes optimal quality, safety, efficiency, and health outcomes for populations of patients.

ACOs are accountable to the patients they serve and to third-party payers for the quality, appropriateness, efficiency and safety of the healthcare they provide. In addition to attending to the ill and injured, providers who work under these plans need to focus on preventive healthcare since there is greater financial reward in prevention of illness than in treatment of the ill.

Continued on page 7

                             

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            



    

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 

    

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7 Continued from page 5 These plans dissuade providers from the use of expensive, newly developed treatment options that may be less effective or have only a marginally higher success rate versus time-honored alternative choices.

Under capitation, healthcare providers assume part or all of traditional insurance risk. Revenues are fixed and each patient enrolled in a capitated plan makes claims against the total resources of the provider.

By accepting a fixed payment, participating physicians essentially become the enrolled patients’ insurers by resolving patients’ claims at the point of care delivery. In doing so, physicians assume the responsibility for the patients’ unknown future healthcare costs.

Large providers have a bigger population than smaller providers.

The increased population size of large providers allows them to more effectively manage variations in service requirements and costs — and, hence manage risk better. However, even large ACOs may not be able to manage global risk as effectively as a large insurer. The populations managed by large insurers typically dwarf the population of existing provider-sponsored ACOs. As a result, the insurers’ annual costs as a percentage of annual cash flow fluctuates far less than an ACO managing a much smaller population. In the case of ACOs with smaller patient populations, the potential variation in annual costs is greater, and the risk that costs could exceed a provider’s annual revenues is larger. The smaller the population under a capitated agreement, the more likely that a relatively few number of costly patients can significantly affect a provider’s costs and increase the provider’s risk of insolvency.

An ACO consisting of physician groups and hospitals generally lacks the requisite accounting, actuarial, underwriting, and financial experience, and capability for managing risk. However, their most significant issue is the greater degree of variation in estimates of annual average patient costs. This leaves the ACO at a significant financial disadvantage in comparison to insurers whose estimates of a population’s risks and costs are far more accurate due to a larger sample size. Because their risks are inversely related to the size of the population under their care, ACOs will inevitably try to increase the number of patients under their care in a capitated plan. This will incentivize mergers, acquisitions, and growth. The only way an ACO can manage populations as effectively as a larger insurer is to achieve populations the size of a typical large insurer and incorporate the level of expertise and risk assessment characteristic of a large insurers.

ACOs could potentially be sponsored by a variety of existing types of healthcare provider organizations including large physician groups, physician and hospital alliances (i.e., Physician-Hospital Organizations or PHOs), integrated delivery networks (IDNs) and independent practice associations (IPAs). All of these organizational entities possess management and organizational elements that are necessary to form an ACO. However, each of these organizations typically falls short of the full expertise and infrastructure needed to assume the risk of managing populations and to achieve the cost structures required to succeed as an ACO. For more information about A Definitive Guide to Accountable Care Organizations, visit bit.ly/1Cat5Ld

Nominating Committee Appointed, Officer Candidates Sought NYSOA President Dr. Christopher Colburn has appointed Dr. David Burstein, President of the Western Society of Optometrists, Dr. Robert McCormick, President of the Central Optometric Society, Dr. David Leibstein, President of the Nassau Optometric Society and Dr. Susan Fisher, Immediate Past President of the NYSOA, to the NYSOA Nominating Committee Dr. Fisher will serve as Chair of the Committee.

The Nominating Committee is one of three standing committees defined in the NYSOA's constitution and is charged with the following: 1. Seek out and encourage potential candidates; 2. Interview candidates; and 3. Issue a report of all qualified candidates.

The officer positions that will be voted upon include: President-Elect, Vice-President and

Secretary/Treasurer Current President-Elect is Dr. Michele Lagana who will automatically become President President Christopher Colburn will automatically become the Immediate Past President.

Society Presidents and current members of the NYSOA Board of Trustees interested in running for a state-wide elected office should forward their intent to run to the NYSOA office. Any member can stand for an elected position and incumbents can be challenged Watch for an email regarding service as an elected officer, what the requirements are for each position and what is needed to submit for consideration by the Nominating Committee.

Elections will take place on Saturday afternoon, January 31, 2015 and new officers will be sworn in on Saturday night, taking office May 15, 2015 For more information, contact the NYSOA office at nysoa2020@gmail.com

201

2015 J A N U A RY 3 0 – FE B R U ARY 1

8

Volume 40 Number 3 2014

THANK YOU 2014 CVC Contributors!

Dr. Diane T Adamczyk Dr. Faye D Algranati Dr. Steven R Ali Dr. Matthew C Allen Dr. Lori E Arbital Dr. Samuel Arbital Dr. Judith Archibold Dr. Jerry L Baker Dr. Stephen M Baker Dr. Edward Berger Dr. Andrew Bienstock Dr. Joseph C Biondolillo Dr. Stuart H Blankman Dr. Brian E Bleiler Dr. Juliana E Boneta Dr. Sam J Bono Dr. David J Braun Dr. Pamela J Brown Dr. Laura A Cantie Dr. Gina M Cardone Dr. Jill C Chafitz Dr. Thomas Chao Dr. David B Chau Dr. Henry Chaung Dr. Allen Chin Dr. Lillian F Chin Dr. Benjamin Chudner Dr. David N Ciccone Dr. Ira A Clement Dr. Roy B Cohen Dr. Jennifer J Colavito Dr. Jason E Compton Dr. Joseph D Conigliaro Dr. Jeannette Cooper Dr. Jeffrey S Cooper Dr. Edward V Cordes Dr. Gail E Correale Dr. Christopher S Couzins Dr. Alexander R Crinzi Dr. Laura Daniels Dr. Julie DeMartini-Ignolia Dr. Regina M Devito

Dr. David J Dexter Dr. Christopher J Digiorgio Dr. Anne E Dodgen-Averitt Dr. Michael J Dolan Dr. Anne M Downey Dr. Nadine M Eisenberg Dr. Jack Eisner Dr. Marina Epelman Meyerowitz Dr. Jack Facchin Dr. Harvey O Feldman Dr. Brian Fengel Dr. Michael Ferri Dr. B Scott Fine Dr. Robert S Fox Dr. Howard S Fried Dr. Jack Fried Dr. Stuart A Friedman Dr. Richard A Frio Dr. Gregory Gaglioti Dr. Gary A Galante Dr. Joseph P Gambacorta Dr. Steven J Ganz Dr. Steven Givner Dr. Gwenda R Gnadt Dr. Ronald S Goldstein Dr. Traci M Goldstein Dr. Vincent B Graniero Dr. Robert S Greenbaum Dr. Israel Greenwald Dr. Gary L Hanley

Dr. Elizabeth Hetrick Dr. Mitchell I Horowitz Dr. Steven N Ihrig Dr. Jerry Jed Dr. Arthur D Jung Dr. Nina M Kalmanson Dr. Viola Kanevsky Dr. Allen I Kaplan Dr. Sanford J Katims Dr. Sandra C Kellett Dr. Mili Khanna Dr. Barry T Kissack Dr. Sarah Boulais Klein Dr. Martin Kornblatt Dr. David M Krumholz Dr. Richard B Krzyzak Dr. Lori Marie Landrio Dr. William J Lapple Dr. Andrew Larson Dr. Eric W Lau Dr. Miriam Lee Dr. Kathy Lee Dr. Dickson Lee Dr. Albert Leif Dr. Patti L Leonard Dr. Michael B Levinson Dr. Rocco F Loccisano Dr. Laurence Lonky Dr. Richard J Madonna Dr. Albert Marcantonio

Dr. Anthony Marinelli Dr. Marie A Marrone Dr. Katherine M Mastrota Dr. Mark R Maxon Dr. Robert P McCormick Dr. Michael J McGovern Dr. Bradley R Meltzer Dr. Lawrence D Miller Dr. Arlene Minkoff Dr. Raymond J Mint Dr. Anthony Mondo Dr. Jason W Moore Dr. Al M Morier Dr. Joseph G Morra Dr. Scott I Morrison Dr. James O Morse Dr. Edward J Moylan Dr. Christopher Murnin Dr. Rebecca A Nally Dr. Charles H Neu Dr. Frederic K Nevins Dr. Ann M Nolan Dr. Michael J O'Connor Dr. Eric Orava Dr. David S Orenstein Dr. Catherine A Pace-Watson Dr. Joanne Palumbo Mozloom Dr. Shruti Pandya Dr. Gina M Parsloe Continued on page 10

9

THANK YOU 2014 NYSOA PAC Contributors!

Dr. Elias S Abboud Dr. Diane T Adamczyk Dr. Faye D Algranati Dr. Steven R Ali Dr. Matthew C Allen Dr. Lori E Arbital Dr. Samuel Arbital Dr. Judith Archibold Dr. Jerry L Baker Dr. Stephen M Baker Dr. Edward Berger Dr. Brian K Berliner Dr. Andrew Bienstock Dr. Joseph C Biondolillo Dr. Teresa Blackstone Dr. Stuart H Blankman Dr. Brian E Bleiler Dr. Casimir K Bobowski Dr. Juliana E Boneta Dr. Sam J Bono Dr. David J Braun Dr. Robert A Brown Dr. Pamela J Brown Dr. Daniel Brunenavs Dr. Brandon Butler Dr. Paul J Caito Dr. Laura A Cantie Dr. Gina M Cardone Dr. Jill C Chafitz Dr. Thomas Chao Dr. David B Chau Dr. Henry Chaung Dr. Allen Chin Dr. Lillian F Chin Dr. Benjamin Chudner Dr. David N Ciccone Dr. Ira A Clement Dr. Roy B Cohen Dr. Jennifer J Colavito Dr. Jason E Compton Dr. Joseph D Conigliaro Dr. Jeannette Cooper Dr. Jeffrey S Cooper Dr. Edward V Cordes

Dr. Gail E Correale Dr. Paul R Cosenza Dr. John J Costello Dr. Christopher S Couzins Dr. Mario J Craig Dr. Alexander R Crinzi Dr. Laura Daniels Dr. Allan E Davis Dr. Julie DeMartini-Ignolia Dr. Regina M Devito Dr. Jack L Devore Dr. David J Dexter Dr. Christopher J Digiorgio Dr. Anne E Dodgen-Averitt Dr. Michael J Dolan Dr. Anne M Downey Dr. Nadine M Eisenberg Dr. Jack Eisner Dr. Jack Facchin Dr. Harvey O Feldman Dr. Brian Fengel Dr. Michael Ferri Dr. B Scott Fine Dr. Murray Fingeret Dr. Kirk C Flynn Dr. Jennifer P Flynn Dr. Robert S Fox Dr. Peter Freitag Dr. Howard S Fried Dr. Jack Fried Dr. Stuart A Friedman Dr. Richard A Frio Dr. Gregory Gaglioti Dr. Gary A Galante Dr. Joseph P Gambacorta Dr. Steven J Ganz Dr. Jerome M Garber Dr. Dana L Getz Dr. Steven Givner Dr. Gwenda R Gnadt Dr. Ronald S Goldstein Dr. Traci M Goldstein Dr. Brad C Gollinger Dr. Steven I Goodman

Dr. Vincent B Graniero Dr. Robert J Grasso Dr. Robert S Greenbaum Dr. Joel Greenberg Dr. Mark L Greenberg Dr. Israel Greenwald Dr. Shari L Gustin Dr. Scott F Hage Dr. Gary L Hanley Dr. Joseph Hargrave Dr. Michelle Harrison Dr. Elizabeth Hetrick Dr. Gary A Holtzberg Dr. Mitchell I Horowitz Dr. Steven N Ihrig Dr. Arthur D Jung Dr. Nina M Kalmanson Dr. Thomas M Kaminska Dr. Viola Kanevsky Dr. Allen I Kaplan Dr. Sanford J Katims Dr. Sandra C Kellett Dr. Mili Khanna Dr. Daniel P Kirkpatrick Dr. Barry T Kissack Dr. Sarah Boulais Klein Dr. Donald B Knapp Dr. Leslie R Kolker Dr. Martin Kornblatt Dr. Ralph Kornblatt Dr. David M Krumholz Dr. Richard B Krzyzak Dr. Lori Marie Landrio Dr. William J Lapple Dr. Andrew Larson Dr. Eric W Lau Dr. Miriam Lee Dr. Kathy Lee Dr. Dickson Lee Dr. Albert Leif Dr. Patti L Leonard Dr. Michael B Levinson Dr. Rocco F Loccisano Dr. Laurence Lonky

Dr. Richard J Madonna Dr. Sergio Marano Dr. Albert Marcantonio Dr. Marie A Marrone Dr. Katherine M Mastrota Dr. Gerald G Mattison Dr. Mark R Maxon Dr. Robert P McCormick Dr. Michael J McGovern Dr. Bradley R Meltzer Dr. Lawrence D Miller Dr. Arlene Minkoff Dr. Raymond J Mint Dr. Marc Mishan Dr. Anthony Mondo Dr. Jason W Moore Dr. Al M Morier Dr. Scott I Morrison Dr. James O Morse Dr. Harvey G Moscot Dr. Edward J Moylan Dr. Joseph J Mueller Dr. Christopher Murnin Dr. Rebecca A Nally Dr. Charles H Neu Dr. Frederic K Nevins Dr. Ann M Nolan Dr. Michael J O'Connor Dr. Eric Orava Dr. David S Orenstein Dr. Catherine A Pace-Watson Dr. Joanne Palumbo Mozloom Dr. Shruti Pandya Dr. Gina M Parsloe Dr. John Richard Paskowski Dr. Hiral Patel Dr. Nehal P Patel Dr. Ralph Paternoster Dr. Lucia Patino Dr. Vernon A Peryea Dr. Raymond Pirozzolo Dr. Frank J Pirozzolo Dr. John P Plow Continued on page 10

10 CVC Continued from page 7 Dr. John Richard Paskowski Dr. Hiral Patel Dr. Nehal P Patel Dr. Ralph Paternoster Dr. Lucia Patino Dr. Vernon A Peryea Dr. Raymond Pirozzolo Dr. Frank J Pirozzolo Dr. John P Plow Dr. Sebastian A Polizzi Dr. Ronald H Poulin Dr. Paul M Pronti Dr. Nicholas A Radetzky Dr. Ami C Ranani Dr. John Ray Dr. Scott J Richter PAC Continued from page 9 Dr. Sebastian A Polizzi Dr. Ronald H Poulin Dr. Paul M Pronti Dr. Paul M Pronti Dr. Todd D Punim Dr. Nicholas A Radetzky Dr. Ami C Ranani Dr. John Ray Dr. Tina M Reeves Dr. Sheldon S Retkinski Dr. Scott J Richter Dr. Douglas G Rickert Dr. Franco Rossi Dr. Theresa Rostkowski Dr. Jeffrey M Roth Dr. Neil Rubin Dr. Alison Ruitenberg Dr. Laurie A Runnerstrom Dr. Denise Samaroo Dr. Philip A Sarikey Dr. Denise D Saunders Dr. Leonard J Savedoff Dr. Catherine C Scandiffio Dr. Jeff M Schafer Dr. Terry R Scheid Dr. James A Schultz Dr. Elliot Schwartz Dr. Steven H Schwartz Dr. Arkady Selenow Dr. Matthew E Sendker Dr. Christopher W Shiomos Dr. David A Siegel Dr. Marc M Silverman Dr. Lauren A Smith Dr. Richard M Soden Dr. Michael P Spellicy Dr. Laura C Sperazza

Volume 40 Number 3 2014 Dr. Douglas G Rickert Dr. Franco Rossi Dr. Theresa Rostkowski Dr. Jeffrey M Roth Dr. Neil Rubin Dr. Alison Ruitenberg Dr. Laurie A Runnerstrom Dr. Denise Samaroo Dr. Denise D Saunders Dr. Leonard J Savedoff Dr. Catherine C Scandiffio Dr. Jeff M Schafer Dr. Terry R Scheid Dr. Elliot Schwartz Dr. Steven H Schwartz Dr. Arkady Selenow Dr. Matthew E Sendker Dr. Mark R Stadlen Dr. Marina Su Dr. Libby Sukoff Dr. Wayne Tabachnick Dr. Barry M Tannen Dr. Andrea P Thau Dr. Jennifer M Tribley Dr. Widad A Valme Dr. David J Vinci Dr. Ralph R Vogel Dr. Kai Wing Wai Dr. William J Waldron Dr. Larry B Wallace Dr. Maureen K Wallen Dr. Thomas P Webb Dr. David L Weinberger Dr. Gary M Weiner Dr. Susan R Weinstein Dr. Patricia E Weisenreder Dr. Jan Weitz Dr. Bernard H Weitz Dr. Kamaljit S Westfall Dr. Paul J Westfall Dr. Denise M Whittam Dr. Aleksandra Anna Wianecka Dr. Gary J Williams Dr. Yvonne M Williams Dr. Reem K Wlaschin Dr. Eva Yan Dr. Anupama Yennamandra Dr. Lori A Youngman Dr. Shandor Zelenger

Dr. Mary Rita Sheehy Dr. Christopher W Shiomos Dr. Marc M Silverman Dr. Lauren A Smith Dr. Richard M Soden Dr. Michael P Spellicy Dr. Laura C Sperazza Dr. Mark R Stadlen Dr. Libby Sukoff Dr. Wayne Tabachnick Dr. Barry M Tannen Dr. Andrea P Thau Dr. Jennifer M Tribley Dr. Widad A Valme Dr. David J Vinci Dr. Kai Wing Wai Dr. Larry B Wallace

Dr. Maureen K Wallen Dr. David L Weinberger Dr. Susan R Weinstein Dr. Patricia E Weisenreder Dr. Jan Weitz Dr. Bernard H Weitz Dr. Kamaljit S Westfall Dr. Paul J Westfall Dr. Denise M Whittam Dr. Aleksandra Anna Wianecka Dr. Gary J Williams Dr. Yvonne M Williams Dr. Reem K Wlaschin Dr. Eva Yan Dr. Anupama Yennamandra Dr. Lori A Youngman Dr. Shandor Zelenger

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Clinical Transformation: Dramatic Changes as Physician Employment Grows

11

Insight Transformation:Driven Dramatic Health

Clinical Changes as Physician Employment Grows Community-based physicians—those previously in private groups—are increasingly selling their practices or seeking employment directly with healthcare systems, and hospitals are aggressively acquiring physicians to remain competitive in the industry. (See Figure 1.)

Figure 1 Historic Baseline & Projected Change Our analysis shows that physicians who are “truly independent” have been declining at 2% annually, projected to decline by 5% annually by 2013.

57% are Independent

49% are Independent

43% are Independent

33% will be Independent

600

683

723

757

793

300

400

500

Increased employment among communitybased doctors has significant impact on the healthcare landscape. Why? Historically, most Americans have visited their doctors in private, small-practice settings. When physicians become employed, patients’ interests are represented by larger organizations.

An enduring trend The physician employment trend will endure, driven by ongoing forces. For physicians, employment offers advantages including: • Relief from administrative responsibilities • Greater access to leading-edge healthcare IT tools, facilities and equipment • A more manageable work week (typically sought by recent trainees)

200

• Stability in a business environment made uncertain by developments such as payment reforms.

100

Total # of Physicians

700

800

Total Physicians vs. Truly Independent1 Projected Change, 2000-2013 (000s)

In this new world, medical device, healthcare IT and pharmaceutical companies will see their target customers shift from individual, self-employed physicians or doctor-owned practices toward hospitals and health systems. Stakeholders will need new strategies for segmenting customers and for marketing and distributing offerings to larger corporate purchasers.

0 2000

2005

Total Physicians

2009

2013

Truly Independent Physicians1

1.Estimated Sources: Accenture Analysis. MGMA. American Medical Association

Meanwhile, for hospitals worried about physician shortages, employing doctors can help lock in expertise and boost patient volumes and revenues in high-growth service lines, including cardiovascular care, orthopedics, cancer care and radiology.

Continued on page 12

Continued from page 11

12

Complexities in the changing landscape will present challenges: • Driver complexity. Depending on their motivations, different hospitals may have more or less urgency to “lock in” physicians and secure their patients. Moreover, this need may vary over time, depending on supply of primary care doctors or specialists. Even if a hospital urgently needs to recruit such physicians, the doctors may remain independent if a proposed deal does not suit them.

• Geographic variation. Differences in physician employment across US healthcare markets necessitate different strategies. Consider a company that develops electronic medical records (EMR) systems.

Strategies for selling to the Houston market (a geographically widespread city where many physicians have tended to remain autonomous) would differ radically from those needed for selling to the New York City market (which comprises numerous Copyright © large 2007 hospitals Accenturethat EMR systems).

Allalready rights have reserved.

To serve diverse markets, the Accenture, logo, andto shift its sales companyits may have High Performance Delivered force structure from national to areregional. trademarks of Accenture.

To serve New York City clients, it may have to develop more solutions-based offerings that span multiple specialties and functions—such as management of business processes.

• Alignment-model proliferation.

Numerous physician-led alignment models serve as alternatives to direct employment of doctors by hospitals. Examples include the physician-hospital organization (PHO) and the independent practice association (IPA). Moreover, under healthcare payment reform, a clinically integrated accountable care organization (ACO) allows collective contracting without the need for employment by a single entity.

Proliferation of these models could preserve physicians’ independence.

Further, each model has a different primary mission, contractual type and governance structure—making reaching and serving the physician market even more challenging.

Surmounting the challenges As the traditionally fragmented provider landscape gives way to one characterized by tighter physicianhospital integration, stakeholders will need to address four key points to surmount the challenges and seize the opportunities presented by this trend: • Healthcare IT, medical device and pharmaceuticals companies: What will the proliferation of hospitalowned medical groups mean for our customer-segmentation, go-tomarket and distribution strategies?

• The payer sector: How will we manage our client relationships and physician networks? As physicians increasingly associate with larger groups and health systems, what will their greater negotiating leverage mean for our business strategies?

• Hospitals: How can we recruit and retain enough physicians with the right skills to capitalize on highgrowth-potential service lines?

• Physicians: What alignment model will enable me to best manage the trade-offs between autonomy and employment?

How the physician employment trend and its implications will unfold remains to be seen. But by preparing now, stakeholders stand a better chance of navigating successfully in the transformed landscape.

Volume 40 Number 3 For more information, please contact: 2014 Andrew A. Ziskind, M.D. andrew.a.ziskind@accenture.com Kristin L. Ficery, M.B.A kristin.l.ficery@accenture.com Richard N. Fu richard.n.fu@accenture.com Accenture.com/insightdrivenhealth.

Accenture: Insight Driven Health Insight driven health is the foundation of more effective, efficient and affordable healthcare. That’s why the world’s leading healthcare providers and health plans choose Accenture for a wide range of insight driven health services that help them use knowledge in new ways—from the back office to the doctor’s office. Our committed professionals combine realworld experience, business and clinical insights and innovative technologies to deliver the power of insight driven health.

For more information, visit: www.accenture.com/insightdrivenhealth.

About Accenture Accenture is a global management consulting, technology services and outsourcing company, with approximately 211,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.6 billion for the fiscal year ended August 31, 2010.

Its home page is www.accenture.com.

Copyright © 2011 Accenture All rights reserved.

Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

13 The Key to Transitioning from Fee-for-Service to Value-Based Reimbursement

By Bobbi Brown and Jared Crapo

The switch to value-based reimbursement has turned the traditional model of healthcare reimbursement on its head, causing providers to change the way they bill for care. Instead of providers being paid by the number of visits and tests they order (fee-for-service), their payments are now based on the value of care they deliver (value-based care).

A lot of this change is long overdue and quite exciting because it’s driving improvements to the delivery of care by mandating better care at a lower cost. But for those providers and health systems that can’t achieve the required scores, the financial penalties and lower reimbursements will create a significant financial burden.

Shifting Revenue Mix: The Rise of Medicare and Medicaid

The first hospital challenge we want to address, shifting revenue mix, is clearly seen in the graph below. The percentage of commercial payers will continue to shrink, while payer types with lower reimbursement rates will increase.

We’ve known for a long time that Medicare expenditures would grow as the baby boomer population aged, but over the same time period, Medicaid has grown at a faster rate.

We expect this trend to continue as the boomers continue to age — and as the Medicaid expansion authorized in the Affordable Care Act is fully implemented.

This change in revenue mix impacts a hospital’s bottom line because Medicare and Medicaid patients are generally not profitable. In 2011, the average hospital margin on Medicare patients was -5 percent. A growing proportion of Medicare business puts considerable strain on hospital revenues.

Transitioning to Value-based Payments

The transition from the fee-for-service (FFS) reimbursement system to one based on value is one of the greatest financial challenges health systems currently face.

This challenge is so big that we will only address of few of its aspects here. We have more information about valuebased purchasing on our website.

Reconciling Value-Based Payments in a Fee-for-Service Environment

Value-based payment contracts are in their infancy, and most are structured according to a shared savings model. Shared savings arrangements differ, but in general they incentivize providers to reduce spending for a defined patient population by offering them a percentage of any net savings they realize. The Medicare Shared Savings Program is the most well-known and standardized example of this new model.

Tracking performance in this kind of arrangement is a significant challenge for health systems because it requires keeping track of two very different payment systems simultaneously. Medicare continues to reimburse health systems on a FFS basis; then, at the end of the year, shared savings bonuses are calculated. Medicare benchmarks each provider against the rate of increase for the overall FFS population. Continued on page 16

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16 Continued from page 13 If a hospital did better than that the FFS population, they get a piece of the savings. Hospitals must operate in the FFS world while attempting to anticipate this value-based bonus.

Volume 40 Number 3 2014 For the last few years, Medicare has required hospitals to track their 30day readmissions rates for heart attack, heart failure, and pneumonia patients. Medicare is about to add three additional populations to this requirement. Many private payers are also asking health systems to track this measure for populations covered in their contracts.

And now health systems are being asked to track 90-day readmission rates.

Multiply this example by all the potential quality measures and patient populations, and you can see how complex this process can become.

Optimizing Margins as Revenue Drops

The shifting revenue mix from commercial to government payers means tighter hospital margins.

Tracking shared savings reimbursements that come in at the end of the year requires health systems to be much more sophisticated in their accounting capabilities than most are today. It simply won’t work to account for all payers and all patients in the same way. A hospital has to know every patient in the accountable care organization (ACO), what services they’re getting, and what it costs. An ACO environment requires considering questions like: for each defined population of patients, what was our financial performance and how did it compare to the contract? The ability to measure performance at this level of granularity will require much more sophisticated IT capabilities than most health systems now have.

The transition from FFS to value-based reimbursement is one that will occur over many years. Frankly, that transition is going to hurt in the short run. To meet value-based goals, hospitals are going to have to reduce utilization among their populations, which will reduce their procedure volume, which will reduce their revenue. The following simple graph illustrates this trend.

Transitioning from Fee-for-service to Value-based Reimbursements

Tracking a Wide Variety of Quality Measures

A lot of today’s value-based incentives — and penalties — rely on quality measures. For many years, providers have submitted quality measures for programs such as Hospital Inpatient Quality Reporting (IQR), Hospital Outpatient Quality Reporting (OQR), and Physician Quality Reporting System (PQRS). The fact that these measures are now tied to penalties and incentives is new. These new valuebased models require providers to prove that they’re meeting quality standards and benefitting patients while cutting costs.

Providers need sophisticated analytics to help them measure financial and quality performance for each population of patients. They don’t want to learn that their reimbursement is going to be poor after it’s too late to do anything about it. Rather, they want to know in the first quarter so they can improve their performance before the end of the year rolls around.

To do this, they need to be able to measure performance on a continuous basis. Furthermore, if they aren’t meeting quality standards, they need to be able to pinpoint the cause: Does performance differ by facility? Which providers are performing best and what can be learned from them?

It’s one thing to handle this level of performance analysis for a single patient population or a single quality measure. It’s another story altogether when you consider how quickly the number of measures a health system must track is multiplying. As an example, let’s look at a small but important area of performance measurement: tracking 30-day readmissions.

Notice how’s there’s no specific unit of time to mark the transition from fee-for-service to value-based reimbursement. Nobody knows yet how long this process will take.

You’ll notice that no specific units of time have been included on this graph. That’s because no one really knows how long this process will take. What we do know, however, is that there will be a transition period during which time total revenue is likely to decrease because the pressure on a hospital’s FFS revenue will increase faster than it can grow its revenue through value-based reimbursement. And that can be scary.

The key to succeeding in the midst of this transition — and beyond — is to constantly wring out costs. With revenue going down, hospitals have to improve margins as much as possible.

For more information and links, please visit bit.ly/1v5bfpG

2015

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