© 2018-2019 Cliff Frank, Healthcare Management Solutions, Inc.

Cliff's Confab Notes/Summaries

Here you'll find notes/summaries of some of Cliff's more informal Confabs, which were 'think tank' style, and included the best minds in the business.

Healthcare Management Solutions Hosted Webinar:  ACO Draft Rule -- Ugly Outcome?

 

Sept. 14, 2018, 9:00-11:00AM, EDT

Highlights from the most recent of Cliff’s Confab's (Draft ACO Rule):

 

Mara McDermott from the consulting arm of McDermott Will and Emory did a fine job of presenting the basics and implications of the draft ACO rule.

 

Key takeaways:

  1. ACO’s will be forced into downside risk contracts in 3rd year of new arrangements. The level of the downside risk will escalate over time. Mara will provide us some numeric examples shortly.

  2. 25% of shared savings in first two years (down from 50%). Makes having both hospital and physician partners squabble over crumbs.

  3. Qualifying for MACRA incentive payments through ACOs may no longer be enough to keep poor performing ACO’s alive.

  4. HCC risk score adjustments capped at 3%. This means that ACO’s need to get their risk scores right, RIGHT NOW. And they need to keep an influx of new Medicare lives to balance out their risk scores if CMS is not going to give full credit for risk scores as patients age and pick up new diseases.

  5. Managing attribution was important before; now managing attribution will be a key function for survival. Prospective attribution option will be available.

  6. Attempts at beneficiary engagement and opt-in may put ACO competing with Medicare Advantage plans contracting with same physicians.

  7. CMS also working on some Direct Contracting options with providers which may also compete with MA plans.

  8. Migration to provider risk-transfer is underway with the active encouragement and rule changing from CMS.

  9. Hospitals may have a hard time staying relevant to a physician-led ACO movement. The financial returns to a hospital for aggressive ACO involvement probably are negative. But to independent ACOs, the returns could be substantial. Hospitals could find themselves dealt out. Interesting dilemma for hospital-employed PCP groups. Stay out or jump in, but now there is no fence-straddlers by year three.

  10. CMS will not permit med-year      

        abandonment of ACO’s losing money,

        as has occurred in the past.

  11. We suspect there could be minor                

        changes in the draft Rule, but not likely

        a wholesale revision. Perhaps some

        tweaking of percentages, and enrollment  

        rules.

Highlights from Cliff's Confab where the impact on the healthcare industry of the coming alliances between non-traditional partners was the topic of the day (May 11, 2018):

Aetna/CVS:

1) In the near term, Aetna/CVS is likely more about drug purchasing and foot traffic in CVS than about re-ordering provider delivery components.

2) Aetna will likely narrow their retail pharmacy offerings.

3) Minute Clinics have a long way to go to be a real substitute for primary care.

4) Minute Clinics may get more disrupted by Telehealth than PCPs.

United/Optum:

1) Optum is a convoluted corporate mess searching for a coherent theme and an identity in the marketplace.

2) Despite their disarray, Optum is still a significant threat to traditional providers as they cherry-pick profitable services and steer care away from inefficient downstream providers in their risk contracts.

3) Optum and United can at times be vigorous opponents of each other.

4) Optum continues to purchase high performing practices but nationalizing the local acquisitions into a brand or product strategy is proving difficult.

5) There is channel conflict between Optum and United with respect to reinsurance, TPAs, and network rentals as Optum has many TPA customers, and United seeks to put those same customers out of business.

Amazon / JP Morgan / Berkshire:

1) Long term, Amazon has the potential to disrupt primary care delivery and chronic care management through their personification of artificial intelligence - Alexa.

2) Amaxon is working from customer to vendor not from provider to patient.

3) Amazon is really good at distributing things that fit in a box.  Those healthcare things that fit in a box may be the first to be disrupted such as pharmaceuticals, supplies, and other hard items.

4) Next could be things like Telehealth, payment processes, and provider ratings (Amazon stars for providers and the services they deliver).

5) Amazon's easiest healthcare provider direct disrupting could come in the form of bundled payment (healthcare in a box) tested on their own employee populations.

6) They have a lot to learn, and a lot of capital with which to pay their tuition.

7) Amazon's current client base is the top 1/3 socioeconomically - very different from Walmart and CVS.

Walmart /  Humana:

1) Both companies serve similar populations.  Walmart sees 100 million store visitors each WEEK!  They have 5000 locations, lots of space to add insurance or health care services, and a huge database on their customers.

2) Humana has familiarity with low income seniors and near seniors.  Humana has deep experience selling insurance to individuals.

3) Would expect Humana / Walmart to focus on both Managed Medicaid and healthcare marketplace to distribute health support services to its members, and use those services to attract new members.

4) Humana couls use Walmart to distribute health support services to its members, and use those services to attract new members.

5) Walmart / Humana is closer to those with social determinants of health and can better reach out and support them than most competitors in the insurance market.

Other observations:

1) These new entrants have way more data on us than just health car CPT codes and can use that data to influence our choices, behaviors, and outcomes than we think.

2) The pace of change is accelerating past the ability of most individuals in health care to adjust.  There will be organizations that become casualties of their unresponsiveness.

3) We had better be careful about what health care system we build,  because we are going to be the prime users of it soon!