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CASE HISTORY/BACKGROUND

Pineridge Quality Alliance is a study in clinical integration, accountable care organizations, and population health. The case study profiles the history, challenges, and opportunities related to development of a clinically integrated network and the sponsoring organizations quest to become an accountable care organization and engage in population health.

In June, 2012, Brent Priday arrived in Pocatello, Idaho, as the newly appointed CEO of the 187-bed Pineridge Medical Center (Pineridge), which had been established in 2002 following the consolidation of Pocatellos two regional hospitals. Priday had served previously as CEO of West Valley Medical Center in Harrisburg, Oregon, where his 120-bed hospital participated in a coordinated care organization1a new state-sponsored healthcare delivery model that seeks to lower costs and improve quality for Oregon Medicaid patients. Priday is convinced that coordinated care organizations and their variants are the wave of the future, and that Pineridge had to get onboard.

Priday believes that passage of the Patient Protection and Affordable Care Act in 2010 (U.S. Department of Health and Human Services, 2016) is a catalyst for disruptive forces that are transforming the traditional healthcare business model, including reimbursement reductions, provider recapitalization and reconfiguration, and new payment models moving from a Curve 1 (volume-based) to Curve 2 (value-based) paradigm (Butts & Gursahaney, 2014).

Though the pace of change will vary by market, Priday believes the shift from Curve 1 to Curve 2 will happen irrespective of an organizations readiness. The question looming for Priday and the Pineridge board is Which of three common approaches should Pineridge take?

Wait and see: Maximize fee-for-service opportunities until the market requires a shift or creates sufficient financial upside to do so.

Be an early adopter: Create first-mover advantage by creating an accountable care organization/clinically integrated network to offset the impact of reduced reimbursement and utilization by increasing market share of covered lives and keeping more of the services delivered to those living within our network.

Hedge our bets: Experiment with pay-for-performance contracts and manage our health systems employee populations until more drastic change is warranted (Butts & Gursahaney, 2014).

Since passage of the Affordable Care Act, over 750 accountable care organizations have been formed nationwide.2 In advancing the concept of accountable care and the merits of clinical integration, Priday explained to Pineridge Medical Centers board of trustees that accountable care organizations are basically groups of doctors, hospitals, and other healthcare providers who organize voluntarily to give coordinated, high-quality care to Medicare and other patients. Coordinated care helps ensure that patients, especially the chronically ill, get the right care, in the right place, at the right time, with the goal of avoiding unnecessary duplication of services and preventing medical errors. Priday noted that when an accountable care organization succeeds in both delivering high-quality care and spending healthcare dollars more wisely, it will share the savings it achieves for the Medicare program (Center for Medicare and Medicaid Services: Accountable Care Organizations, 2016).

Priday knows his organization is not ready to form an accountable care organization per se and participate in accountable care organization programs with the Centers for Medicare & Medicaid Services. Nevertheless, he understands the different kinds and types of accountable care organizations and is preparing his organization for eventual participation. A sample of accountable care organization programs sponsored by the Centers for Medicare & Medicaid Services is outlined in Table 4.1.

Table 4.1. Centers for Medicare & Medicaid Services-sponsored accountable care organization types

Medicare ACO type

Launched

Description

Medicare Shared Savings Program (MSSP)

2012

Initial ACO model established by the Patient Protection and Affordable Care Act.

Pioneer ACO Model

2012

Designed specifically for organizations with experience offering coordinated, patient-centered care, and operating in ACO-like arrangements. More advanced and more flexible than MSSP.

Advance Payment ACO Model

2013

Provides advance, up-front payment to ACOs in MSSP model. Designed to provide support to organizations whose ability to achieve the three-part aim would be improved with additional access to capital, including rural and physician-owned organizations.

ACO Investment Model

2015

An ACO model of pre-paid shared savings that builds on the experience with the Advance Payment Model.

Next Generation ACO Model

2015

For HCOs experienced with ACOsdesigned to assume more risk and reward.

Comprehensive End-Stage Renal Disease (ESRD)

2016

First disease-specific ACO model designed by CMS for Medicare beneficiaries with ESRD.

Source: Centers for Medicare & Medicaid Services (2016).

CLINICAL INTEGRATION: A PREREQUISITE TO ACCOUNTABLE CARE

From his experience in Oregon, Priday understands that development of a clinically integrated network is an essential precursor to establishment of an accountable care organization in southeast Idaho. Within days of his arrival at Pineridge, Priday advocated the merits of clinical integration and a Pineridge-sponsored clinically integrated network. With assistance from trusted advisers he developed a white paper on clinical integration that he shared with interested parties and potential stakeholders. The three-part paper addressed the questions: What is clinical integration? Who should clinically integrate? and Why should you clinically integrate? (See Appendix A.)

THE PINERIDGE QUALITY ALLIANCE

Priday and the Pineridge board decided that being an early adopter and hedging our bets were prudent choices. Ultimately, the Pineridge Quality Alliance (PQA)a clinically integrated networkwas established in August 2013. PQA has the following mission:

To be an innovative healthcare team dedicated to utilizing the medical resources of the community to bring higher quality medical care, enhanced medical value, improved medical outcomes, reduced medical costs, and increased collaboration between the men, women, and children of southeastern Idaho and their medical providers. (Adopted by the PQA Board, December 19, 2013)

Concurrent with its launch in late summer 2013, initial physician contracts were extended to clinicians initially in Bannock and Bingham counties (PQAs primary service area) with the goal of extending an invitation to hospitals and clinicians in seven adjacent counties over the next 1236 months (Appendix B). PQA contract addressed the following key provisions: the need for transparency; joint contracting with insurance plans; compliance with PQA initiativesincluding adherence to clinical benchmarks, participation in PQA-sponsored training programs, and adoption of efficient and high-quality clinical practices; and agreements to track and share quality performance measures and other data.

LEADERSHIP AND STRUCTURE

In the months leading up to and immediately following initiation of the PQA, the alliance was led by an external consultant. In September 2014, Karlyn Norton was hired as PQAs first full-time executive director. In August 2015, PQA hired Dr. David Bryan as its first full-time medical director. Bryan noted, Pineridge Quality Alliance is the first and only clinically integrated network in eastern Idaho. It was founded and is operated by physicians in the interest of improving quality and controlling the cost of medical care using robust and accurate data. It is clearly the future of medical care.

Since its inception, PQA has been a physician-led organization, with a 9-person board of directors, 6 of whom are physicians (Table 4.2). In December 2013, the PQA governance structure was formed (Table 4.3).

By mid-2014 the foundational governance and operating structures for PQA were established (Table 4.3 and Figure 4.1). Norton is especially pleased with the July, 2015, hiring of two full-time care managers who coordinate care for patients with high-risk or chronic conditions, or who simply need someone to help them navigate the complicated healthcare system.

Table 4.2. Pineridge Quality Alliance (PQA) board of directors

Member name

Specialty

Brock Bailey, MD (Chair)

Family medicine

Camila Wixom, MD

Cardiology

Donald Davis, MD

Pediatrics

Alexis Gomez, MD

Family medicine

Raymond Marriott, MD

Family medicine

Mia Wesley, MD

Orthopedics

Brent Priday

Pineridge Medical Center Administration (CEO)

Jake Abram

Pineridge Medical Center Administration (CFO)

Luciana Martinez

Pineridge Medical Center Foundation (CEO)

INSURANCE COMPANY/PAYER CONTRACTS INITIATIVES

In January 2014, Blue Cross ConnectedCare3 became an offering on the Idaho Insurance Exchange.4 Previously, PQA had formed a partnership with Blue Cross of Idaho to manage patients who reside in southeast Idaho. Concerning its partnership with Blue Cross of Idaho, Norton opined this is an extremely important venture and, hopefully, the first of many partnerships with payers that allow PQA providers the opportunity to offer their patients a more guided and personalized healthcare experience. By referring patients to the highest quality PQA providers and helping them navigate their services, PQA enables primary care providers the opportunity to more actively participate in their patients downstream care. Only then will the alliance begin to coordinate care better, reduce unnecessary procedures, and improve overall health status of those they serve.

Table 4.3. Pineridge Quality Alliance governance structure: board and committee responsibilities

Board of Directors

Overall program oversight and decision-making authority; budget approval; committee participation approval

Network Participation Committee

Provider participation criteria; recruitment and oversight of provider participation agreements

Payer and Finance Committee

Oversight of contract terms, payer opportunities, employee benefit plan, and financial distributions

Quality, Utilization, and Health Information Technology (HIT) Committee

Creation of HIT infrastructure, reporting needs, and implementation plan; development of clinical performance measures for provider disease groups and provider participants; and establishing utilization management targets

Practice Administrators Advisory Council and Operations Committee

Feedback and recommendations on program decisions related to ambulatory and inpatient clinical operations

Note: The Pineridge Quality Alliance board and subcommittees of the board meet bimonthly to quarterly, or as needed.

Figure 4.1. Pineridge Quality Alliance, table of organization.

In July 2016, Norton explained that drastic changes were being made to the Blue Cross ConnectedCare benefit design and fee schedules to further incentivize patients to receive their care within the PQA network. Going forward, the added copay and deductibles to patients who opt out of PQA will be so significant that far fewer services will be sought outside the network. The shift in plan design will reinforce the importance of staying in the network and allowing PQA to manage care more effectively than could be done with traditional preferred provider organization5 plans. In early 2015 PQA extended its relationship with Blue Cross of Idaho to support True Blue Medicare Advantage6 members in southeast Idaho, thus enabling PQA to perform population health and care management activities for these more resource-intensive, difficult-to-manage Medicare patients.

In mid-2015 PQA contracted with Regence BlueShield of Idaho on that insurers Total Cost of Care program7 in southeast Idaho. Another population managed by PQA was Pineridge employees and their dependents (effective January 2015). This arrangement required an expansion from a physician-only network to one that included providers across the entire continuum of care, including allied and ancillary professionals/providers (see Table 4.4), thus allowing the provider network to support the employee health plans third-party administrator (UMR [United Medical Resources]). Norton said the hospital is interested in using its new clinically integrated network to prove it could deliver better quality care for employees at lower overall cost. A summary of these population health-related contracting initiatives is provided in Table 4.4.

Table 4.4. Population health contract initiatives

Date

Pineridge Quality Alliance partnership

Summary

Jan. 2014

Blue Cross of Idaho Connected Care

Commercial point of service.1 Population estimate: 1,200 members

Jan. 2015

PMC Employee Health Plan through UMR3

Commercial third party administrator.2 Population estimate: 2,300 members

Jan. 2015

Blue Cross of Idaho True Blue

Medicare Advantage health maintenance organization. Population estimate: 900 members

July 2015

Regence Blue Shield of Idaho Total Cost of Care

Commercial preferred provider organization. Population estimate: 700 members.

Note: Humana, PacificSource, and Aetna have expressed interest in partnering with Pineridge Quality Alliance.

1. A point-of-service plan (POS) is a type of managed care plan that is a hybrid of health maintenance organization (HMO) and preferred provider organization (PPO) plans. Like an HMO, participants designate an in-network physician to be their primary care provider. But like a PPO, patients may go outside of the provider network for healthcare services.

2. UMR is not a health-insurance provider in its own right but rather a third-party plan administrator. Founded in 1983 as United Medical Resources, UMR provides administrative services for self-funded health-insurance plans.

3. A third-party administrator (TPA) is an organization that processes insurance claims or certain aspects of employee benefit plans for a separate entity.

NETWORK DEVELOPMENT AND GROWTH

Two years following inception, PQA included 580 clinicians from 71 provider groups representing not-for-profit, for-profit, public, private, urban, and rural-based domainsall working toward a common goal of clinical transformation and collaboration consistent with the Institute for Healthcare Improvement Triple Aim.8

By fall 2016, PQA included representation from over 30 medical and allied health specialties (Table 4.5). The PQA network growth by selected specialties is outlined in Table 4.6.

Table 4.5. Pineridge Quality Alliance network and specialty composition

Anesthesia

Home health

Otorhinolaryngology

Ambulatory surgery center

Hospice

Pediatrics

Behavioral health

Independent lab

Physical/occupational/speech therapy

Cardiology

Internal medicine

Podiatry

Chiropractic

Nephrology

Psychiatry

Durable medical equipment

Neurology

Psychology

Endocrinology

Obstetrics/gynecology

Pulmonology

Family practice

Ophthalmology

Radiology

Gastroenterology

Optometry

Skilled nursing facility/long-term acute care unit

General surgery

Orthopedics

Urgent care Urology

The PQA was relatively successful in recruiting participation from physicians and allied health professionals in Bannock County, but by early 2016 the alliance had been unable to secure contracts with surrounding critical access hospitals and clinicians in southeast Idaho (Appendix B, District 6). Norton explains that these rural, independent hospitals and their local physicians do not feel any urgency to change. She also believes they dont fully understand the purpose and importance of participating in a clinically integrated network. Some balk at paying a 5% tax (5% off the PQA fee schedule) to care for patients they already see independent of PQA-insurance company contracts. Norton notes, however, that some critical access hospitals in the region are showing a more active interest in PQA; she understands that without a broader network of providers PQA will be limited in its ability to fully realize the benefits of a clinically integrated network (see Appendix A: Why should you clinically integrate?).

Table 4.6. Pineridge Quality Alliance network growth by selected specialties

CLINICAL INTEGRATION TOOLS-PROGRAMS-SERVICES

Not surprisingly, the more than 70 organizations that made up the PQA by early 2014 employed many kinds and types of medical records and practice management systems. To facilitate realization of the benefits of a truly clinically integrated delivery system, in mid-2014 PQA purchased a set of tools known as Crimson from the Advisory Board Company, a consulting firm (Advisory Board Company, 2016). PQA board member Dr. Donald Davis explains that Crimson will allow us to start collecting data and observing quality measures from all providers in the network. Once we have meaningful data we can decide where there is variation, why outliers exist, and how we can implement strategies to improve our individual and collective outcomes. The three modules that make up Crimson Clinical Advantage are outlined in Table 4.7.

Table 4.7. Crimson Clinical Advantage

Crimson Continuum of Care

Helps hospitals achieve the physician alignment needed to advance quality goals and secure cost savings. Places credible performance profiles in the hands of physicians, enabling them to better meet healthcare organization cost and quality goals.

Crimson Population Risk Management

Helps hospitals manage total cost and quality for defined populationsincluding self-insured employee plansand inform risk-based contract negotiations with payers. Combines insight on health system strategy with a robust benchmarking database and clinical algorithms; physicians get a 360-degree view of patient care, including an evaluation of the organizations strengths and liabilities, and more.

Crimson Care Management

Helps hospitals create and run effective, collaborative care management programs by providing intelligent workflows and integrating complex data sources to customize care programs and drive compliance. Generates data that will unlock actionable insights that help care managers work smarter and maximize impact.

Davis explains that one important benefit to a clinically integrated networkwith access to powerful datais that we start to pay more attention to our patients overall health, no matter where they receive their care, because we now have visible data. And, because we are now working together as a collective team to provide the highest quality care, we want the entire network of PQA providers to do well, not just ourselves.

Concerning Crimson Care Management, Norton notes that Crimson analyzes data fast enough to provide real-time updates to patient care teams. Crimson generates to-do tasks, alerts, and reminders in response to patient admission, discharge, or care program data. It then routes action requests to the appropriate care team members for prompt intervention, as needed. The Crimson Population Risk Management tool can easily track member, population, and provider progress toward organizational and contractual goals. In elaborating the merits of clinical integration and the need for population health and care management, Norton often uses Figure 4.2 as an example of how the Crimson software categorizes populations into high-risk, rising-risk, and low-risk care categories. Once the population is risk stratified, providers can focus on persons who need the most help. Norton further explains that Crimson software integrates data from patient registries, electronic health records, and other practice management systems to improve coordination of care delivery between and among primary and special practices and hospitals.

Since 2014, PQA has implemented the capabilities of Crimson Continuum of Care at each physician site, enabling these providers to track both aggregate and patient-specific clinical and financial data. Additionally, PQA staff provides aggregate and practice-specific reports to practices and selected PQA committees. Provider and patient-specific problems represent opportunities for improvement. Sample reports are provided in Appendix C.

Figure 4.2. Crimson Capabilities (Advisory Board Company, 2016).

CLINICAL AND OPERATIONAL MEASURES

In conformance with the PQA Participating Provider Agreement, PQA providers agree to actively and meaningfully participate in the alliances performance improvement and data-sharing initiativesto share data contained in medical records, billing, claims, practice management, or other systems, electronic, or otherwise. In fall 2014, the PQA Quality, Utilization, and HIT committee, with approval of the PQA board, selected 15 measures to begin tracking and analyzing. Donald Davis, a pediatrician on the board, explains These are Physician Quality Reporting System9 and National Quality Forum10 measurements and represent a great starting point (Appendix D). In 2015, PQA legal counsel recommended the alliance add 48 more measures: 510 per major provider type for a total of 63 measures.

EDUCATION AND TRAINING

In November 2014, PQA leaders announced it would collaborate with Optum11 to provide a series of educational opportunities focused on the Medicare Advantage Risk Adjusted Program12 and the Medicare Access and CHIP Reauthorization Act of 2015.13 Norton reported the following:

Optum works with healthcare professionals and health plans to help them attain improved health outcomes. With relevant tools and support, Optum can help healthcare providers in the early detection, ongoing assessment, and accurate reporting of chronic conditions. Optum has technology and health intelligence solutions that help providers accurately document and code conditions while improving the overall quality of care. The investment in technology, education, and training is key to PQAs ability to achieve the noted Triple Aim.

Buck Ridley, PQAs information technology specialist, observed in the first year (following implementation of the Crimson and Optum initiatives) we will be able to see, individually and collectively as an alliance, where the opportunities for improvement are. By year 5, we will use the information in a sophisticated manner to improve the overall cost, quality, and utilization of care we deliver.

LOOKING BACKLOOKING AHEAD

Reminiscing three years following its inception, Pineridge CEO Priday observed, We wanted to create a purposeful change in the way we deliver patient care that will directly affect the health of our community. At a time in which our industry has been turned on its head and stressed past it limits, we have instituted a transformation that will require even more from us than has already been demanded.

Three years following its launch, PQA has invested roughly $2.5 million in legal and consulting fees, staffing, information technology, and marketing; administrators and clinicians have invested well in excess of 20,000 hours in planning and implementation-related activities. The future includes many methods of expansion, such as broadening existing payer partnerships, working with Humana14 regarding opportunities for their Medicare Advantage members, partnering with Aetna on their commercial group members, and fostering relationships with larger employer groups in the community to improve quality and reduce costs of care for their employees. Additional quality measures, clinical pathways, and care management programs represent other opportunities for developing improvement.

At the June 2016, PQA board retreat Priday addressed the following challenges common to the industry:

Succeeding in population health requires more than completing a Medicare Shared Savings Program application and creating a Federal Trade Commission-compliant structure.

Creating an effective and scalable population health/clinical integration infrastructure requires a significant investment of capital, time, and resources.

It is extremely difficult to align providers across the care continuum in a way that drives quality and sufficient cost savings to create meaningful shared savings dollars.

The financial benefits of shared savings programs are directed at primary care physicians and are inherently short term unless they incorporate bundled payments as a means to engage specialists and focus on reducing spending on high-cost procedures.

Payers are often unwilling to structure mutually beneficial contracts with networks that offer sufficient upside potential to offset losses in fee-for-service revenue because the networks have unproven track records or lack sufficient geographic reach to meet access requirements.

Not all networks are capable of contracting directly with employers, either due to their insufficient payer capabilities or limited geographic coverage for a broad employee base.

In the context of these industry-wide issues, Norton discussed a handful of challenges specific to PQA:

PQA has unique challenges compared with clinically integrated networks in other parts of the county due to mountainous topography and rurality.

We dont have the span of providers and specialties that larger markets have. Thus its critical for us to align with independent providers in our community to form lasting and collaborative partnerships that will allow our patient populations to access the high-value services they need without leaving the area.

The geographic, rural, and relatively sparsely populated nature of our provider community means we must strive for excellence in cost and qualityand to have an accurate measure of what the healthcare consumer perceives as value because their definition may be quite different from ours. As consumers become more savvy, we must ensure that what we offer meets their expectations.

Although PQA board members publicly affirm their commitment to the clinically integrated network, getting those leaders and other physician network members fully engaged in using Crimson data to improve their practices is difficult. One prominent board member privately stated, Honestly, Im not sure I get it. Crimson is complex and Im still not using the data to change or improve my practice. Even though the PQA medical director is talented and committed to the cause, he is stretched too thin and unable to meet with network physicians and clinicians to teach, motivate, or monitor their performance.

In frustration, Norton occasionally reaches out to a seasoned and accomplished mentor from across the state. Look the mentor said, your network is new and small, but look at what you have accomplished be patient, learn to fail as fast and inexpensively as possible and just keep moving forward!

Priday and Norton say their observations/conclusions should not lead PQA to abandon its clinically integrated network and eventual accountable care organization strategy because pressure from employers to reduce premiums and the governments expansion of value-based programs will continue, regardless. Rather, they contend, If we are going to be paid differently, we must organize and deliver care in a way that leads to different results. Developing our clinically integrated network is a way for us to respond to these changes, overcome the above challenges, and achieve the requisite level of transformation to secure sustainable contracts and successfully navigate the transition from Curve 1 to Curve 2 (Butts & Gursahaney, 2014).

Following vigorous and sometime contentious discussion, the PQA board agreed to the following broadly stated goals for 20172019:

Increase provider network participation.

Design and expand the PQA information technology platform to make data fully accessible and actionable.

Develop full transparency and integration of data across the continuum of care.

Expand the PQA care management structure.

Achieve better management of high-risk patients.

Establish clinical practice guidelines and related metrics for headache/migraine and hypertension patients.

Connect PQA patients to nonclinical community resources.

Improve engagement of patients and caregivers in care planning.

Optimize deployment of staff.

Establish additional payer contracts based on value and shared savings opportunities, including preparing an application for the Medicare Shared Savings Program.