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Case Studies in Value Based Purchasing Strategies With Results

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Elements of Health Care Purchases. Effective achieves ... Market Share (Tier and Steer) Transparency (Public Report Cards) ... HC21 Hospital Tier and Steer ... – PowerPoint PPT presentation

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Title: Case Studies in Value Based Purchasing Strategies With Results


1
Case Studies in Value Based Purchasing-Strategies
With Results
  • Jerry Reeves MD
  • Health Innovations

2
Value Based PurchasingIn Health Care
  • Elements of Health Care Purchases
  • Effective achieves the desired outcomes
  • Efficient affordable
  • Satisfying good patient experience
  • Safe consistent with evidence based guidelines
  • Value Based Purchasing
  • The combination of the above elements most
    consistent with the values of the purchaser

3
Effectiveness of Care-Doctors not offering?
Patients not getting?
Adults receive about half of recommended care
54.9 Overall care 54.9 Preventive care
53.5 Acute care 56.1 Chronic care
From E. McGlynn et al. - Rand
4
Efficiency of Care
5
National Employer Opinions-Effective Strategies
to Contain Cost
  • Better Care
  • Disease Management 71
  • Tighter Networks 55
  • Shift Cost (Engage Patients)
  • CDHP/ Savings Acct 68
  • Higher Employee Cost 58

1,997 responding employers. responding very
effective somewhat effective Kaiser/HRET
Survey of Employer-Sponsored Health Benefits,
2007
6
Out of Pocket Cost Trends
  • of population with plan deductible gt500
  • 15 in 2000 38 in 2006
  • Number with plan deductible gt500
  • 2 million in 2004 10 million in 2007
  • Projections
  • 20 million enrolled in High Deductible Health
    Plan by the year 2010
  • Consumers out-of-pocket healthcare costs could
    increase 68 (to 420 Bn) by 2015
  • 45 million uninsured in 2007 and rising

From Financial Times August 6, 2007, page 8
7
Vicious Cycle
  • More people with means have less or no insurance
  • Safety net hospital visits increase more rapidly
    among the uninsured
  • Hospital and doctor bad debts increase rapidly
  • Providers push insurers to help offset losses
  • Insurers charge higher premiums to employers
  • Employers shift more costs to employees
  • More people with means have less or no insurance

From Financial Times August 6, 2007, page 8
8
Impacts of Higher Healthcare Costs
  • Late care, avoided care
  • Low adherence to treatments
  • Poor health outcomes
  • Threat to salaries and employability of employees
  • Higher uncompensated care for providers
  • Company survival threatened

9
Where Does The Money Go?
  • Hospital 1507 per capita 36
  • RX 909 per capita 22
  • Physician 890 per capita 22
  • Dental 294 per capita 7
  • Home Hlth 255 per capita 6
  • Other 282 per capita 7
  • Total 4,136 per capita 100

2007 AHRQ Med Exp Panel Survey www.meps.ahrq.gov
10
The Picture of Success-Healthy Company 2010
  • Corporate Health Team
  • Many health messages
  • Benefits
  • Healthy living
  • Explain choices impacts
  • Cover prevention
  • Fitness wellness
  • Culture of health
  • HRA and self care help
  • Health coaches advice
  • Incentives for better choices
  • Healthy choices
  • Better providers
  • Measure program impacts
  • Demonstrate performance improvement (providers)

11
Virginia Employer Survey-Toward Healthy Company
2010
14 VBCH employer members participated. September
2007
12
Virginia Employer Survey-Toward Healthy Company
2010 (contd)
14 VBCH employer members participated. September
2007
13
Performance Improvement4 Basic Models
  • Cash Incentives (Pay-for-Performance)
  • Market Share (Tier and Steer)
  • Transparency (Public Report Cards)
  • Penalties (Non-Payment, Barriers, Network
    Changes)

14
National P4P Survey
  • 100 active P4P programs in 2005 and growing
  • P4P sponsors cover 50 million people

15
P4P Examples
  • Hospital P4P
  • CMS-Premier Hospital Quality Incentive
    Demonstration
  • Medical group P4P
  • Integrated Healthcare Association (IHA)
  • Physician P4P
  • Bridges to Excellence
  • Family Practitioner P4P in England
  • National Health Service

16
Hospital P4P CMS/PremierQuality Incentive
Demonstration
  • CMS will provide quality bonus payments to 260
    hospitals based on performance
  • 5 clinical areas heart attack, heart failure,
    pneumonia, bypass, hip and knee replacement
  • 34 measures including process and outcomes
  • Top 10 get 2 bonus
  • Second decile gets 1 bonus
  • Top 50 get public recognition
  • Worst hospitals will get penalized if they stay
    below the bottom 2 deciles

17
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18
From Public Reporting and P4P in Hospital
Quality Improvement. NEJM 2007 356 486-96.
19
Medical Group P4P IHA
  • 7 large health plans in California
  • Bonus payments to medical groups based on
  • Mix of clinical (50), patient survey (40), and
    IT (10) metrics
  • Each plan designs its own payment method
  • Aetna maximum 3.5 bonus
  • Blue Shield maximum 2.00 pm/pm
  • Independent entity to aggregate scores and
    publish scorecard (Office of the Patient
    Advocate)
  • Goal Reward performance and improvement

IHA Integrated Healthcare Association
20
PacifiCare Medical Group P4P Results
  • 20 Quality Index profile measures
  • Payment thresholds set at 75th and 85th
    percentiles
  • Incentive pool 18M in 04
  • 17 of 20 measures improved an average of 20
    between 2004-2005

21
Physician P4P Bridges to Excellence
  • Cardiac Care Link
  • Patient self-management of cardiac care
  • Individual MDs earn up to 160 per cardiac
    patient
  • Diabetes Care Link
  • Participation in recognition program through ADA
    and NCQA
  • Individual MDs earn 80 per diabetic patient
  • Physician Office Link
  • Clinical information systems, pt. education, care
    management
  • Individual MDs earn up to 50 bonus per patient
  • Positive ROI Calculations for Payers
  • Health Improvements for Patients

22
BTE Service Areas
http//www.bridgestoexcellence.org/
23
Quality of Primary Care in England with the
Introduction of Pay for Performance. NEJM
2007357 181-190.
24
HC21 Hospital Tier and Steer
  • Identify top performing hospitals based on
    meeting the Leapfrog safe practices index
  • Construct Consumer Guide to Hospitals as
    education piece on importance of selecting high
    quality hospitals tier hospitals according to
    performance
  • Develop benefit design to forgive copay for
    employee inpatient admissions to high performing
    hospitals

25
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26
HC21 Hospital Tier and Steer
Member Responsibility
Example 1
Example 2
Medical Benefits Summary
27
Transparency Public Report CardsSurgeons and
Hospitals Mortality Rates
Public Report Cards-Cardiac Surgery and Beyond
NEJM 20063551847-49.
28
State Report Cards - Cost, Safety
http//www.oregon.gov/DAS/OHPPR/docs/MI.pdf
29
Transparency- Hospital CMS Core Measure
Trends(From http//www.healthinsight.org/ )
(13 got better 9 got worse)
30
Non-payment -Not Billing for Never Events
  • Retained foreign object from surgery
  • Death or serious disability from
  • Patient disappearance
  • Medication error
  • Incompatible blood transfusion
  • Electric shock in health facility
  • Fall in health facility
  • Wrong surgery
  • More

Leapfrog Group Position Statement on Never Events
www.leapfroggroup.org
31
CMS Non-Payment (2008)
  • Staphylococcus aureus bloodstream
    infections/septicemia
  • Catheter-associated urinary tract infections
  • Pressure ulcers
  • Incompatible blood transfusion
  • Air embolism
  • Retained foreign object from surgery

From American Medical News- June 18, 2007
32
Union Health Trust Drivers for Outpatient Care
Penalties
O/E Ratio Observed to Expected Ratio
33
Penalties Union Health Trust
  • Network Changes
  • Outpatient Services for Certain Radiology, (CAT
    Scans, MRIs), Dialysis, and Outpatient Laboratory
    Services Limited to Fewer Network Providers
  • Barriers
  • Preauthorization to Reduce Abuse of Acid Reflux
    Inhibitors

Save 320 out of pocket for CT scan at
preferred facility
34
Penalties- Impact on Cost Trends
(West Virginia Book of Business Annual Trends
12 per year)
36 lower than baseline trend 49
lower than baseline trend
35
Total Medical Expenses Actual and Projected
Through 2010
36
Union Health Trust Combinations-Report Cards,
P4P, Steerage, Penalties
  • Public Report Cards
  • Directory Gold Star Program Publicity Campaign
  • Top half among specialty peers
  • Guideline adherence- cancer, heart disease,
    asthma, diabetes, ulcers, and infections.
  • P4P
  • 75 Guideline adherence, 25 ETG efficiency
  • Steerage
  • Case Managers (Medical Home Selection)
  • Customer Service (Steerage)
  • Penalties - Network Changes

37
Market Share Changes
38
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39
Medical Cost Increases(per Eligible Enrolled
Employee Includes Rx)2 year savings 69 million
Year 2 Savings 43 M
Predicted
Restructured physician network
Year 1 Savings 26 M
Projected at 13 trend
Actual
8
1
13
17
National HMO CY Premium Trends 03 14.6
04 12 05 8.8
Fiscal Year 2001 - 2005
40
Performance ImprovementStrategies That Work
  • Cash Incentives (Pay-for-Performance)
  • Market Share (Tier and Steer)
  • Transparency (Public Report Cards)
  • Penalties (Non-Payment, Barriers, Network
    Changes)
  • Recommendations
  • Collaborate First
  • Validate Fair Measures
  • Be Brave
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