Tiered Networks

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Tiered Networks
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ButP4P Momentum Is Challenged

• Practicing Physicians Still Skeptical
• Amount of Dollars Still Small . . . And IOM
  Recommends A Slow Phase-In
• Programs Do Not Integrate Costs and Patient
  Centeredness
• New Political Leadership Could Slow Momentum . .
  . And The Right Is Skeptical As Well

Source Robert S. Galvin, MD, 2nd National P4P
Summit, February 14, 2007
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AndP4P Momentum SHOULD Be Challenged
MEASURES . . . . . Process, Outcomes and the
Pipeline Crisis EVIDENCE . . . . .
. Self-Fulfilling Prophecies and Death By
Academia FRAMEWORK . . . P4P versus Overall
Payment Reform
Adapted from Robert S. Galvin, MD, 2nd National
P4P Summit, February 14, 2007
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Death By Academia?
Based on a handful of studies with small
incentives, including the Premier Demonstration
. . .The CMS may have much to gain from
recognizing that pay for performance is
fundamentally a social experiment likely to have
only modest incremental value.
BUT we arent comparing to a placebo what
about the failed experiment of current system
of payments?
Adapted from Robert S. Galvin, MD, 2nd National
P4P Summit, February 14, 2007
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Is P4P The Same As Payment Reform?
Current Payment System is Fatally Flawed

• Fee-for-Service
• Weighted Towards Interventions
• Discourages Prevention/Coordination

But P4P Programs Put Rewards On Top Of This
Structure

• You Can Put Lipstick On A Pig, But Its Still A
  Pig

Source Robert S. Galvin, MD, 2nd National P4P
Summit, February 14, 2007
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Moving beyond make-upchanging the health care
diet
Fixing current payment dysfunction with pay for
performance as an add-on to existing is
like. Fixing the American obesity epidemic by
the add-on of broccoli to the Big Mac WE NEED
a new diet and portion control
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Beyond Broccoli on the Big Mac

• Pay for Results
• Pay more efficient delivery (e.g., e-visits or
  telephone services)
• Pay for care coordination
• Pay for episodes cutting across inpatient and
  outpatient
• Differential payment based on use of care
  improving processes (HIT)
• Non-payment for errors
• Non-payment for unproven technologies

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Physician Practice Perspective

• Each is a small business owner
• 2000 3500 people/physician at any point in time
  (ever- changing)
• Those people are represented by, on average,
  75-100 payors each with their own
  rules/expectations . . and even more employer
  groups are represented

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MGO Contracting Model

• Outline
• Historic Development
• Antitrust Background
• Messenger Model
• The Need to Change
• Plans for Change

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Historic Development

• Initial Model
• MGO utilized a single signature contracting model
• In this model MGO had the ability to negotiate
  fair rates of physician reimbursement
• Why did we change?

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Historic Development

• Time Sequence the Legal Climate
• 1995 MGO bought 50 ownership in OhioHealth
  Group, a PHO that owned an HMO license.
• Because of the financial risk the HMO ownership
  represented to MGO, MGO met the financial
  integration requirements to negotiate payment
  rates for physicians.
• 1996 Antitrust scrutiny of physician
  organizations was less strict.
• FTC Relaxes Standards for Physicians Networks
• Wall St. Journal August 29, 1996

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Historic Development

• Time Sequence the Legal Climate
• 2000 FTC intensifies its investigation and
  regulation of physician networks
• 2001 OhioHealth Group gets out of the HMO
  business
• MGO ceased to meet the financial integration
  test. MGO could no longer negotiate rates for
  physicians.

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Antitrust Background

• General Applications of Antitrust laws to
• Physician-Payor Contracting
• Each physician practice is considered a
  competitor with every other physician practice.
• Competitors are restricted from colluding and
  restraining competition (as prior slide).
• Cartel an unintegrated group of competitors
  who
• Agree on price or other competitive terms of
  dealing
• Engage in a concerted refusal to deal

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Antitrust Background

• Permissible Physician Conduct
• A Tax ID can set its fees and terms of
  contracting
• Form an integrated group of practitioners
• There are two standards for integration
• Financial Integration
• Clinical Integration
• 3. Adopt a messenger model arrangement

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Messenger Model

• Functional Definition
• An intermediary organization (e.g. MGO) delivers
  the payers terms and rates (message) to the
  network physicians and then delivers the
  individual responses (message) of the physicians
  back to the payer.

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Messenger Model

• Guidelines
• Negotiation is not allowed!
• Discussion and Agreement among physicians is not
  allowed.
• The messaging organization (e.g.MGO) is
  restricted in what it can tell physicians about
  the offer, i.e. MGO can provide written objective
  analysis of the proposal, but cannot provide any
  opinion about the acceptability of the proposal.

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The Need to Change

• Strengths of the Current Messenger Model
• Level of performance established during the
  single signature era.
• Structural advantages

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The Need to Change

• WEAKNESSES of the current Messenger Model
• MGO cannot negotiate physician rates
• The current model is Not a sustainable model for
  long-term physician success

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Plans for Change

• Goals
• Create the structure and processes that allows
  MGO to negotiate for physicians
• Become Financially Integrated
• And
• Clinically Integrated

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Plans for Change

• Definitions
• Financially Integrated Networks
• Risk contracts
• Performance Based model
• Clinically Integrated Networks
• Measurable quality of the whole is greater than
  the sum of its parts as a result of EITHER
  additional new programs and/or additional
  coordination of existing programs

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Objective

• Develop an integrated approach
• for taking MGO and OhioHealth
• (as OhioHealth Group PHO)
• to the market of payers and/or employers.
• The initial focus will be on an Employer
• named OhioHealth

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Process Targets (Part 1)

• Identify Process measures that align with
  OhioHealths priorities of promoting employee
  wellness and controlling costs
• Engage MGO physicians in development of the
  measures
• Support the measures by the data warehouse and
  other data inputs
• Recognize that not all MGO physicians will be
  impacted by the pilot program or in any given
  year of an ongoing program
• Provide financial rewards for those whose
  performance earns it
• Implement Educational Interventions physicians
  and employee/employer

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Baseline Measures Forming the Standards of
Eligibility for Rewards for MGO Physicians
Caring for OhioHealth Insured Patients
Note To quality for rewards, the percentage of
your list of eligible patients (next page) needs
to exceed these standards. Each
baseline measure is the actual result for this
population in the last 1-3 years (the actual
number of years depends on the specific measure)
Colo-rectal Cancer
Cervical Cancer
Your Measure for 2007 The proportion of your
patients having received either a fecal occult
blood test, barium enema, flexible
sigmoidoscopy or colonoscopy in 2007
XX
XX
Your Measure for 2007 The proportion of your
patients having received a mammogram in 2006 or
2007.
Your Measure for 2007 The proportion of your
patients having received a Pap Test in 2005-
2007.
The proportion of patients age 50-64 receiving
either a fecal occult blood test, barium enema,
flexible sigmoidoscopy or colonoscopy in 2006
The proportion of women age 18-64 having received
a Pap test during 2004-2006.
U.S. Preventive Services Task Force
Recommendation 2003
U.S. Preventive Services Task Force
Recommendation (modified) 2002

• The emphasis of the program is that the patients
  get the services not which doctor should get
  credit (or not) for the service being provided.
• When a patient receives the desired services the
  physician (s) deemed having principally cared for
  that patient (including OB GYN)) will get
  credit.

Your Measure for 2007 The proportion of your
Patients having received all 3 of the following
this year 1) HBA1c test at least 2/year 2)
annual LDL level and 3) annual urine
microalbumin or prescribed an ACE/ARB
Your Measure for 2007 The proportion of your
patients having received at least one coded
preventive health service visit in 2007.
Your Measure for 2007 At the end of the year,
your proportion of patients in 2007 will be
greater than the percentage in 2006.
National Committee for Quality Assurance HEDIS
2006
Standards of Medical Care in Diabetes 2007
Diabetes Care January 2007
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Economic Targets (Part 2)

• Establish Baseline Total Cost
• - example MGO Insured v. non-MGO
  Insured cost PMPM
• Establish Expected/Targeted Cost
• - historical trends, disease demographics
  /associated programs of care, etc.
• Measure Performance v. Target
• - The better the results of the baseline and
  initial performance comparisons, the quicker we
  are ready to take our story to the market
• IF Performance is better than Target, a portion
  of the savings are rewarded to MGO Physicians
• (Data from the Warehouse will support these
  measurements)

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Overall Economic Targets

• We are identifying those members that are
  receiving the majority of their care from MGO
  physicians
• The goal is to analyze the PMPM cost of those
  members that are receiving most of their care
  from MGO physicians and compare it to the overall
  cost of the other members
• As we develop an accurate methodology for
  calculating cost we can use it to set targets for
  the MGO physicians
• Because of the nature of the calculation, and the
  approximations that by necessity go along with
  it, the PHO Strategy Group has been very careful
  to draw only the conclusions verifiable by the
  data

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Economic TargetsNext Steps

• Finalize methodology
• When data is available, perform same calculation
  on all data for 2006
• Use 2006 data to set 2007 targets

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  "Every system is perfectly designed to get the
results it gets."  

•      Paul Batalden, M.D.