What’s Happening at MCOL – Webinar events on Wednesday and Thursday this week

By Claire Thayer, May 21, 2012

Last year, CMS unveiled the Pioneer ACO program to spur growth of Accountable Care Organizations prior to the full implementation of the Medicare Shared Savings program. These organizations are pioneers in the sense that they have already embarked on organized care practices and have some of the needed infrastructure in place and are therefore leading the way for others. Please join Milliman's Jill Van Den Bos on Wednesday this week as she addresses the elements of the Pioneer ACO model, the components of financial risk and cost drivers involved and strategies to identify interventions and opportunities.

On Thursday this week, our webinar explores the future of California’s healthcare districts. The decades immediately after World War Two saw the creation of public healthcare districts in California that provided a framework for a burgeoning system of community and rural hospitals. Today, the purpose of these hospital districts is being questioned. Join Michael A. Dowell, partner in the law firm of Hinshaw & Culbertson LLP, Walter Kopp, president of Medical Management Services, Inc. and Cleo Burtley, manager with The Camden Group on May 24, 2012 at 10 a.m. Pacific as they explore the future of California’s healthcare districts.

To learn more about these and other upcoming Healthcare Web Summit events, visit: or call MCOL's at 209.577.4888. 


Contracting Web Summit e-Poll Results

By Clive Riddle, May 18, 2012

Survey results are now available from the Contracting e-poll held in conjunction with HealthcareWebSummit’s 2012 Contracting Web Summit, which provide a measure of stakeholder contracting views and priorities, with comparisons to previous year’s answers.

Participants were asked to respond to three items:

1.  Please categorize your organization. Purchaser; Provider; or Vendor/Other

2.  What are the greatest opportunities from a contracting perspective?

3.  What are the greatest challenges from a contracting perspective?

Responses to Greatest Opportunity by Year:

  • Advancements in analytics capabilities: 18.5% (2012); 19.4% (2011); 7.5% (2010)
  • Advancements in EHRs & transactions: 7.4% (2012); 10.2% (2011); 16.7% (2010)
  • Consumer engagement initiatives: 7.4% (2012); 12.0% (2011); 10.8% (2010)
  • Emergence of value based/newer payment models: 29.6% (2012); 29.6% (2011); 26.7% (2010)
  • Formation of ACOs: 8.6% (2012); 7.4% (2011); 16.7% (2010)
  • Increased covered population due to health reform: 18.5% (2012); 13.9% (2011); 17.5% (2010)
  • Potential growth in medical homes: 7.4% (2012); 3.7% (2011); 0.8% (2010)
  • Other: 2.5% (2012); 3.7% (2011); 3.3% (2010)

Responses to Greatest Challenge by Year:

  • Consumer engagement Initiatives: 8.6% (2012); 6.5% (2011); 9.9% (2010)
  • Continued market consolidation: 13.6% (2012); 7.4% (2011); 14.1% (2010)
  • Cost pressures due to economic downturn: 21.0% (2012); 33.3% (2011); 28.1% (2010)
  • ICD-10 transition: 7.4% (2012); 0.9% (2011); 6.6% (2010)
  • Increased complexities of benefit design: 12.3% (2012); 11.1% (2011); 8.3% (2010)
  • Increased mix of government vs. commercial covered populations: 14.8% (2012); 16.7% (2011); 14.9% (2010)
  • Issues related to health reform provisions: 17.3% (2012); 15.7% (2011); 14.1% (2010)
  • Other: 4.9% (2012); 8.3% (2011): 4.1% (2010)

For the third year in a row, a plurality of respondents thought that the emergence of value based and other applicable newer payment models was the greatest opportunity from a contracting perspective, with 29.6% of respondents answering this way. In 2011, the same percent of respondents agreed that this was the greatest opportunity which was three percentage points greater than in 2010.

The next most prevalent answers to what was the greatest opportunity were advancements in analytics capabilities and increased covered population due to health reform. For both of these options, 18.5% of respondents answered this way. These responses had been the second and third most prevalent answers in 2011 as well, however, advancements in analytics capabilities was chosen by 19.4% of respondents and increased covered populations due to health reform was chosen by 13.9%.

The remaining answers to what were the greatest opportunities from a contracting perspective (not including other which was chosen by 2.5% of respondents) were chosen by a similar percent of respondents, all of which were within one percentage point of 8%.

When broken down by respondent category there were some variations. While those who categorized their organizations as purchaser or vendors/others followed the overall trend of designating the emergence of value based and other applicable newer payment models as the greatest opportunity from a contracting perspective, providers were split on what the greatest opportunity was between the emergence of value based payment models and increased covered population due to health reform both of which garnered 25% of respondents in that category.

The biggest variation among respondent category was on the response to whether advancements in analytics capabilities was the greatest opportunity from a contracting perspective. Overall, 18% of respondents thought that this was the greatest opportunity. Purchasers were the most likely to answer this way with 30.4% of those respondents choosing this as the greatest opportunity. Respondents categorizing themselves as vendor/other were the least likely to respond this way with only 7.1% believing it as the greatest opportunity.

Just as with the greatest opportunity, the respondent’s choice for the greatest challenge carried over a three year trend with a plurality of respondents signaling that cost pressures due to economic downturn was the greatest challenge with 21% of respondents answering this way. This was a much smaller plurality than in previous years and was only 3.7 percentage points greater than the next most common answer for what the greatest challenge was; issues related to new health reform provisions.

The rest of the options for what the greatest challenges are from a contracting perspective are (excluding other) all fell within ten percentage points of each other. 8.6% of respondents chose consumer engagement Initiatives, 13.6% chose continued market consolidation, 7.4% chose ICD-10 transition, 12.3% chose increased complexities of benefit design, and 14.8% chose increased mix of government program vs. commercial covered populations as the greatest challenge.

Looking at responses year over year, most answers ticked slightly up in 2012 compared with 2011 and 2010 with two exceptions; cost pressures due to economic downturn, which dropped 12.3 percentage points from 2011, and increased mix of government program vs. commercial covered populations, which dropped almost 2 percentage points from 2011.


What’s Happening at MCOL – New Silver Companion e-newsletter subscription for MCOL Silver and Gold members

By Claire Thayer, May 14, 2012

MCOL Silver and Gold members now have the option to designate a Silver Companion e-newsletter subscriber who will also receive the entire package of e-newsletters sent to MCOL paid members.

The MCOL Silver Companion e-newsletter subscription may be offered to a valued colleague, favorite client, or even your home or other personal e-mail address. The recipient of the Silver Companion e-newsletter subscription will be eligible to receive the same MCOL discounts as the MCOL Silver or Gold member, including 50% off HealthcareWebSummit registration fees and 10% off other MCOL products.

To learn more about MCOL Memberships and the Silver Companion e-newsletter subscription value added benefit, visit: or call MCOL's at 209.577.4888.


Guy D'Andrea on Pitfalls and Practical Solutions with Shared Savings

By Clive Riddle, May 10, 2012

Guy D’ Andrea, Managing Partner at Discern Consulting, was one of the featured speakers in this week’s Contracting Web Summit 2012, and spoke on  Shared Savings: Pitfalls and Practical Solutions.

For those who need a refresher in what Shared Savings are all about, Guy summarized these core concepts:

  • Retrospective calculation of provider’s cost savings (usually relative to overall trend) for a defined population
  • Provider is eligible to receive some percentage of the savings as an incentive payment
  • Usually (but not always) a “one-way” risk arrangement
  • Can include some prospective, fixed payment (essentially a pre-payment for expected savings)

Shared Savings, of course, are a centerpiece of accountable care and medical home initiatives. But stakeholders do run into pitfalls as they try to come to agreement, and implement such arrangements. Before moving on to discuss building a payment model for shared savings with readmissions, Mr. D’Andrea discussed these pitfalls and some general potential solutions.

The prospective payment is a sticking payment. Guy notes that providers will always want the maximum possible prospective payment, since it is “risk-free” revenue.  Payers will want to delay payments until savings are achieved.” His solution: “treat prospective payments as an investment, and discount expected savings to present value.”

Then the argument comes up that is more difficult for high-performing providers to generate savings, because they tend to get penalized for having already done well, leaving less room for future improvements. His solution: “use a ‘blended’ model, in which the target budget is set using a combination of the provider’s own cost history, and that of the peer group.”

Next  comes the concern that  a provider’s experience, particularly when the population isn’t large enough to adequately spread the risk, will be influenced more by luck with outliers than factors under the provider’s control. The D’Abdrea solutions: (1) Establish minimum population sizes and savings rates;  (2) Tie payments to performance on clinical process measures; and (3) Exclude “random, rare, and expensive” events from cost of care calculations.

Lastly,  he addresses the concern of sustainability: he notes that “if savings are a “one-time” event, providers may be worse off financially in the long-run than if they saved nothing (especially for integrated systems).” His solutions: (A) Use a multi-year model that partially credits providers with savings in earlier years; and (B) In the long-term, seek to evolve from shared savings to “two-tailed risk” payment models, such as bundled payment or global capitation.


What’s Happening at MCOL – HealthcareWebSummit events hosting two Webinars

By Claire Thayer, May 7, 2012

Concerned about hospital readmissions? On Wednesday this week, Drs. Joe Gifford and Robert Herr from Regence Group and Dr. Brian Wolf from BCBS Rhode Island provide a Medical Director's perspective on aspects of their current approaches to drive accountability by reducing unnecessary hospital readmissions.  Understand the critical need to develop the expertise and repository of attributed data tracking for re-hospitalization rates by hospital and provider groups.

On Thursday this week, we’re pleased to host The Third Annual Health Plan Contracting Web Summit which will address how contracting stakeholders should position themselves for 2012 and beyond.

Agenda for Thursday’s (May 10) live webinar (Eastern times):

  • 1:00 pm - 1:30 pm Current Trends in Value-Based Contracting, by Terri L. Welter, Principal, ECG Management Consultants, Inc. 
  • 1:30 pm - 2:00 pm  Evaluating Bundled Payment Contracting - Kathryn V. Fitch, RN, MEd, Principal, Healthcare Management Consultant, Milliman
  • 2:00 pm - 2:30 pm  Financial Incentives Model for Minimizing Readmissions-- Guy D'Andrea, President and Founder, Discern Consulting

Pre-Recorded Presentations in Windows Media Video format with audio and synchronized slide advancement:

  • ACO Capitation 101: Understanding Medicare ACOs’ Real Potential to Influence Patterns of Care, by William A. MacBain, MPS, Senior Vice President, Gorman Health Group
  • Transparent Cost Networks, a Consumer Driven Solution, by Will Fox, Principal and Consulting Actuary, Milliman
  • Additional Presentation by William DeMarco, President and CEO, Pendulum HealthCare Development Corporation
  • Plus other Web Summit features including a Contracting Article Library, and an exclusive Contracting e-poll

For these and other upcoming events: