American Academy of Ophthalmology

American Academy of Ophthalmology "Practice/Profession of Ophthalmology: Impact of Consolidation" presented at OIS@AAO 2014

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Practice/Profession of Ophthalmology:
Impact of Consolidation
David!W.!Parke!II,!M.D.!
CEO!
American!Academy!of!Ophthalmology!

2. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
Consolidation
! Happening!in!industry!
! Happening!in!medicine!generically?!
! Happening!in!ophthalmology?!
• What!is!the!trend?!
• What!are!the!likely!impacts?!
• How!can!we!make!it!work!for!the!profession!and!for!
the!paDents?!

3. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
Healthcare System Integration:
Is It an Unintended Consequence?
! “The!economic!forces!put!in!moDon!by!the![PPACA]!
Act!are!likely!to!lead!to!ver$cal(organiza$on(of(
providers!and!accelerate(physician(employment(by!
hospitals!and!aggrega$on(into(larger(physician(
groups.”!
• DeParle!et!al,!Annals&of&Internal&Medicine,!2010!

4. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
Hospital Integration
! 20%!(1K!of!5K)!of!U.S.!hospitals!will!seek!out!mergers!
between!2013V2018!
• Booz!&!Co.!
!
!
! 65%!of!buyers!are!nonVprofit!in!2012!
• Trinity!Health/Catholic!Hospital!East!!82!hospitals!
• Ascension!Health!!!!!!! 113!hospitals!
!
! 2012:!1/3!of!ASC’s!that!‘disappeared’!became!hospital!outVpt!
departments!(HOPD’s)!

5. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
How Significant is MD Employment?
! 53%!of!MD’s!are!currently!selfVemployed!!
• 61%!in!2007;!76%!in!1983!
• 37%!of!primary!care;!72%!of!surgical!subVspecialists!
• AMA!survey!of!3,466!MD’s!released!9/16/13!
! 212,000!MD’s!employed!by!community!
hospitals;!160,000!in!2000!!
• AHA!2011!data!

6. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
! About!25%!of!physicians!are!in!ACO’s!
! About!15%!planning!to!join!soon!
• Shortell!et!al.,!Health&Services&Research,!2014!
! 11%!of!ophthalmologists!parDcipate!in!ACO’s!
• Contractually!affiliated:!!77%!
• AAO!!2013!survey!data!
Physician ACO Participation

7. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
! 1%!of!ophthalmologists!employed!by!ACO’s;!!
!
2%!of!ophthalmologists!employed!by!hospital!
or!hospitalVowned!MD!group!
!
• 2013!Academy!biennial!survey!of!US!members!
Ophthalmologists and ACO’s

8. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
Ophthalmology and Hospitals
! Eye!care!amounts!to!less!than!1%!of!hospital!revenue!
! Hospitals!lose!$150V150K!per!yr!per!employed!physician!
in!the!first!3!years!of!employment!
• But!hospitals!generally!receive!5V10X!surgeon!salary!in!
related!revenue—not!in!ophthalmology!
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! ASC’s!being!repurchased!by!hospitals!resulDng!in!
diversified!procedure!mix!and!↑per!procedure!revenue!

9. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
Consolidation: Narrow Networks
! Medicare!Advantage:!narrowing!networks!
! ACA!exchanges!have!mostly!narrow!network!
plans!
• McKinsey:!70!percent!of!products!
! One!OB!in!one!network!for!400!sq!miles!
! One!reDna!surgeon!for!200,000!people!

10. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
Narrow Networks: Going Forward
! RegulaDon!of!network!adequacy!
• All!ACA!plans!approved!for!adequacy!
o But!much!more!anenDon!for!next!year!
• Complaints!unlikely!to!block!narrow!networks!
o Federal!outlays!dependent!on!keeping!premiums!
down!
o Public!much!more!sensiDve!to!costs!now!

11. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
Consolidation: More Reference Pricing–
total joint replacement
! California:!Price!varies!from!$15,000!to!$110,000!
(commercial!PPO!populaDon)!
! Anthem!Blue!Cross!and!CalPERS!(1.4M)!have!established!
a!threshold!of!$30,000!–!reference!price!–!for!a!standard!
inpaDent!hip/knee!replacement!procedure.!
! PaDent!exposed!to!full!price!above!$30,000!level!
! 46!hospitals!qualify!–!over!50!did!not.!
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! Impact(for(AMD,(glaucoma,(refrac$ve(surgery?(

12. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
Is Ophthalmology on the Radar?
! Ophthalmology!has!two!of!the!“Top!Twenty”!
diseases!on!total!cost!basis!for!CMS:!
• Cataract!
• Glaucoma!
! If!CMS!included!!Part!B!outpaDent!drug!costs,!
ophthalmology!would!have!four,!including:!
• AMD!
• DiabeDc!reDnopathy!

13. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
Consolidation: Focus on Quality
! $65BB!paid!for!‘higher!quality!and!more!
efficient!treatment’—within!FFS!
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! 155,000!PCP’s!and!60,000!specialists!in!such!
arrangements–!and!24MM!enrollees!
• July!9,!2014!BCBS!AssociaDon!

14. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
IRIS™: Consolidation of Data
! 3,356!Academy!members!signed!with!IRIS!
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! 3,797!interested!and!awaiDng!contract!
• Some!either!on!EPIC!or!not!eligible!
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! 23!different!EHR’s!!

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Uptake
! OIS!2013:!!!!!!!!370,000!pt!visits!
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! OIS!2014:!!10,140,000!pt!visits!
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!!!!!!!!3,940,000!unique!pts!

16. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
The Projections
! OIS!2013:!!!!2MM!pt!visits!by!2016!
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! OIS!2014:!!33MM!pt!visits!by!2016!

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Clinical IT Consolidation:
Potential Industry Impact
! Bener,!faster,!cheaper!clinical!trials!with!‘realVworld’!
data!
! Huge!populaDonVbased!natural!history!data!
! Bener!postVmarket!surveillance!studies!
! More!rapid,!complete!comparison!of!products!for!
physicians!and!industry!!
! Periodic!new!datapoints!allow!for!customizaDon!

18. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
Ocular Surgery News,
March 10, 2014
&
“To&jump&to&the&bo=om&line:&Every&ophthalmologist&should&
not$just$walk$but$run$to&sign&up&for&this&program.&Not&only&
will&it&provide&great&value&to&the&individual&ophthalmologist&
and&his&or&her&pracEce,&but&it&&is&criEcal&to&the&success&and&
future&standing&of&ophthalmology&in&the&U.S.&as&a&whole.”&!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Richard!L.!Lindstrom,!MD!!!!!!
!!

19. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
Ophthalmology as a Career
Extremely
Satisfied
49%
Very Satisfied
38%
Somewhat
Satisfied
10%
Somewhat
Dissatisfied
2%
Very Dissatisfied*

20. WWW.AAO.ORG AMERICAN ACADEMY OF OPHTHALMOLOGY
Extremely/Very Satisfied
with the Academy
58%
62%
65%
67%
69%
74%
75% 76%
0%
20%
40%
60%
80%
100%
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