Case Studies in Value Based Purchasing Strategies With Results

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Case Studies in Value Based Purchasing-Strategies
With Results

• Jerry Reeves MD
• Health Innovations

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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

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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
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Efficiency of Care
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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
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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
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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
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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

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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
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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)

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Virginia Employer Survey-Toward Healthy Company
2010
14 VBCH employer members participated. September
2007
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Virginia Employer Survey-Toward Healthy Company
2010 (contd)
14 VBCH employer members participated. September
2007
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Performance Improvement4 Basic Models

• Cash Incentives (Pay-for-Performance)
• Market Share (Tier and Steer)
• Transparency (Public Report Cards)
• Penalties (Non-Payment, Barriers, Network
  Changes)

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National P4P Survey

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

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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

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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

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From Public Reporting and P4P in Hospital
Quality Improvement. NEJM 2007 356 486-96.
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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
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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

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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

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BTE Service Areas
http//www.bridgestoexcellence.org/
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Quality of Primary Care in England with the
Introduction of Pay for Performance. NEJM
2007357 181-190.
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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

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HC21 Hospital Tier and Steer
Member Responsibility
Example 1
Example 2
Medical Benefits Summary
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Transparency Public Report CardsSurgeons and
Hospitals Mortality Rates
Public Report Cards-Cardiac Surgery and Beyond
NEJM 20063551847-49.
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State Report Cards - Cost, Safety
http//www.oregon.gov/DAS/OHPPR/docs/MI.pdf
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Transparency- Hospital CMS Core Measure
Trends(From http//www.healthinsight.org/ )
(13 got better 9 got worse)
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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
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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
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Union Health Trust Drivers for Outpatient Care
Penalties
O/E Ratio Observed to Expected Ratio
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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
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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
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Total Medical Expenses Actual and Projected
Through 2010
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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

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Market Share Changes
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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
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1
13
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National HMO CY Premium Trends 03 14.6
04 12 05 8.8
Fiscal Year 2001 - 2005
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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