Richard Siegrist

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Health Care Quality Implications for Consumers,
Employers, Providers Health Plans HRHC
Business Health Summit 2005 June 8, 2005
Richard Siegrist SVP General Manager
HealthShare Technology, Inc., a
WebMD company Adjunct Lecturer, Harvard School of
Public Health
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The Focus

• Choose the right hospital
• Employers
• Health Plans
• Consumers
• Be the right hospital
• Proactive, not reactive
• Competitive opportunity, not threat
• Effective use of available information key
• Commitment to consumer transparency

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Consumers Care about Quality

• 82 of consumers feel that the quality of
  hospital care varies greatly (Forrester)
• 42 of consumers had been affected by a medical
  error, either personally or through friend or
  relative (National Patient Safety Foundation)
• 16 of consumers considered changing hospitals
  based on quality, 12 actually did change
  hospitals (Forrester)

4
Quality Goal Six Sigma

• Six Sigma 3.4 defects per million
• Achieved in other industries
• Three Sigma 67,000 defects per million
• Best for most healthcare processes
• Difference between Three to Four Sigma and Six
  Sigma is 10-15 of revenue (GE estimate)
• Clearly a long way to go in healthcare

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How would you choose?

• Situation
• Your father has a leaky heart value and needs to
  undergo a heart valve replacement
• Father lives in a suburb of Philadelphia
• Questions
• Where should you suggest he go for care?
• Local community hospital vs. downtown teaching
  hospital?
• What factors would you consider to be most
  important?
• Any different approach if had congestive heart
  failure?

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Historical Hospital Selection

• Consumers currently select hospitals by
• Proximity/ Convenience
• Physician recommendation
• Familiarity

Research conducted by Gomez Inc. Survey of 1295
consumer representative of active online hospital
users
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How evaluate hospital quality?

• Objective Metrics
• Structural
• Process
• Outcomes
• Subjective Metrics
• Patient Satisfaction
• Reputation
• Recommendations
• Convenience

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Subjective Metrics

• Reputation
• US News World Report
• Recommendations
• Primary care physician or specialist
• Family and friends
• Convenience
• How far willing and able to travel
• Family and work realities
• Patient Satisfaction

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Satisfaction Measures

• PEP-C
• Patients Evaluation of Performance in Calif.
• Overall, maternity, surgical, medical
• Six areas such as respect for patients prefs,
  care coordination, physical comfort
• 1 to 3 stars
• HCAPS
• Will measure patients experiences with their
  hospital care
• Builds upon CMS CAPS survey which measures
  consumer experiences with health plans

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Structural Measures

• JCAHO Accreditation
• Scope of Services offered
• Technology available
• Hospital Type
• Teaching vs. Community
• For-profit vs. Non-profit
• Religious affiliation
• Staffing
• Physician specialty accreditation
• Nurse staffing levels

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Process Measures

• CMS
• Heart failure
• Heart attack
• Pneumonia
• Leapfrog Leaps
• CPOE
• ICU staffing
• Evidence based hospital referral (EHR)
• 4th Leap NQF Safe Practices
• JCAHO Core Measures

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Outcomes Measures - Effectiveness

• Volume
• Absolute volume
• Volume minimum
• Volume threshold
• Mortality
• Procedure specific in hospital mortality
• Failure to rescue
• Complications
• Procedure specific complications
• Agency for Healthcare Research and Quality (AHRQ)

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How evaluate hospital cost?

• Cost to the hospital
• Length of stay
• Hospital charges
• Hospital full or direct cost
• Cost to the health plan
• Based on claims experience
• Cost to the consumer
• Out-of-pocket cost

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What Consumers Want to Know
I am most interested in knowing the following
information when selecting hospitals
for ALL
Most important factors
respondents
Whether the hospital has high
88
80
complication rates
Whether the patients were satisfied
88
79
with the care
How many patients were treated for
83
68
my condition
for ALL
Least important factors
respondents
67
63
How expensive the hospital is
Whether the hospital is a teaching
67
50
facility (affiliated with a medical school)
How big the hospital is (number
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of beds, etc.)
Base respondents who have used the Net to
research hospitals quality
Source Forrester's Consumer Technographics
Omnibus Study
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Volume Does Matter

• Halm, Lee and Chassin Literature Review in Annals
  of Internal Medicine (2002)
• 77 of 88 studies examined showed statistically
  significant relationship between higher volume
  and better outcomes, none showed significant
  relationship in opposite direction
• Dr. Arnold Epstein, HSPH, Editorial in NEJM
  (April 2002)
• After two decades of research, it is time to
  move ahead. Few doctors would routinely send
  their own family members to undergo a high-risk,
  elective operation at a hospital where such
  operations were rarely performed (or to a
  physician who rarely performed them) if good
  alternatives were nearby.

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Mortality, of Course

• Severity Adjusted Mortality
• Severity adjustment essential for credibility
• APR-DRGs from 3M or RDRGs from Yale
• Significantly different from area average as
  focus
• May be controversial, but is of highest interest
  to consumers and employers
• Failure to rescue as useful complement
• Interest in mortality at procedure level

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Leapfrog Indicators - EHR

• Kane and Siegrist Study Findings (2002)
• Achieving mortality rates equivalent to those of
  hospitals meeting the Leapfrog criteria could
  substantially reduce patient deaths by an
  estimated 2,340 deaths per year
• Compliance with the TLG volume criteria varied
  widely by state, both in terms of number of
  hospitals meeting the criteria and of patients
  treated in hospitals that meet the criteria.
• Most hospitals providing the TLG-identified
  procedures did not meet the volume criteria.
• Massachusetts Findings Highlights
• Esophageal Cancer 15 hospitals met, 66 of
  cases 3.5 mortality vs. 9.1
• AAA 16 hospitals met, 59 of cases 8.5
  mortality vs. 15.3

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Complications

• HCUP Original Quality Indicators
• Adverse effects, wound infection, pneumonia after
  major surgery, pulmonary compromise, UTI, etc.
• AHRQ Patient Safety Indicators
• Accepted Indicators (20) and Experimental
  Indicators (17)
• Examples infection due to medical care, post op
  complications, OB trauma, technical difficulty,
  decubitus ulcer, failure to rescue

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Adverse Effects Variation
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Adverse Effects Cost Impact
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Cost of Quality Issues

• Analysis for MA, NY and FL comparing patients
  with quality issue vs. patients at risk but
  without the quality issue (severity adjusted)
• Wound infection 100 more expensive
• Pneumonia 80 more expensive
• Pulmonary compromise 80 more expensive
• Adverse effects 50 more expensive
• OB complications 30 more expensive
• Quite consistent results across states

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The Impact on Behavior

• Forrester Survey November 2004
• Online quality information being accessed
• 23 that needed hospital care used a hospital
  comparison tool
• 20 via health plan site, 4 via employer site
• Online quality information influencing decisions
• 52 reassured about the hospital they intended to
  use
• 16 considered changing hospitals
• 12 actually changed based on quality information

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Tiering at what Level?

• Major Category
• Adult Med/Surg
• Obstetrics
• Pediatrics
• Center of Excellence
• Cardiac
• Cancer
• Orthopedics
• Procedure/Diagnosis
• CABG
• Pneumonia
• Colon Surgery

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How are tiers determined?

• Number of Tiers
• Two if in or out of network
• Three if tied to benefits (similar to drugs)
• Four if quartile focus
• Typical Three Tier Structure
• Equal distribution
• 25 1st, 50 2nd, 25 3rd
• Basis of Tier Determination
• Local Market
• State
• National

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What weighting for measures?

• Quality and cost typically equal in weighting
• Often separate dimensions combined 50/50 at the
  end
• Outcomes measures more heavily than process
  measures for quality
• Differing weights for volume based on philosophy
• Morality and complications always high weight
• Leapfrog and CMS typically lower
• Health plan cost heavily weighted for cost
  dimension

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How set score for a measure?

• Quartiles typically used
• Usually based on range of absolute values
• Sometimes tied to progress or participation
  (CPOE, IPS)
• Points for quartile performance
• 10 for 1st quartile, 7, 4, 1
• 10, 8, 6, 4
• 10, 7.5, 5, 2.5
• Meeting thresholds sometimes used for volumes or
  other measures

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What are criticisms of tiering?

• Penalizes teaching hospitals
• Doesnt capture true severity of illness
• Penalizes community hospitals
• Volume too heavily weighted
• Penalizes hospitals that code completely
• But may be offset by resulting higher severity
• Uses imperfect administrative data
• Creates perverse incentives regarding patient
  selection

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How is tiering being used?

• Hospital performance or value index
• Presented in provider directory, often with
  separate quality and cost scores
• Often at procedure/diagnosis level
• High performance hospital networks
• In or out, Comparison of hospital networks for
  national accounts
• Centers of excellence
• Cardiac, cancer, transplants, etc.
• Consumer benefit tiers
• Differing co-pays based on tier
• Pay for performance
• Hospital negotiations

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Tiering Examples

• Tufts Navigator Tiered Payments
• Plan offered to Mass State employees
• Hospitals placed in 3 tiers for employee
  co-payment based on hospital quality and health
  plan cost
• Very well received by employees
• National Plans Hospital Value Index
• Index based on relative performance on health
  plan cost (claims based) and hospital quality
• For display in provider directory and for use in
  hospital contract negotiation
• Regional Plans Pay for Performance
• Severity adjusted quality comparison across
  multiple measures
• Being used in pay for performance programs
• Employers/Coalitions Quality Report Card
• High volume procedures, outcomes and process
  measures
• Public release of comparisons, internal cost
  control

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Historical Perspective - Hospitals

• Perform well on JCAHO accreditation
• Intense devotion of resources for a short period
  of time
• One time focus until re-accreditation
• Avoid a major medical mistake that generates
  significant adverse publicity
• Overdose of cancer drug given to Boston Globe
  health reporter at Dana Farber Cancer Institute
• Heart/lung transplant from incompatible donor for
  Mexican teenager Jesica at Duke
• Death of living liver transplant donor at Mount
  Sinai
• Talk constantly about providing the highest
  quality, but know deep down that quality problems
  occur almost every day

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Be the right hospital

• Why does it make financial sense?
• Success under pay for performance and tiered
  networks
• Ultimately lower cost (poor quality costs more)
• Ultimately more business
• Why does it make strategic sense?
• Competitive advantage for being a leader in
  quality improvement
• More productive relationships with health plans
  and employers
• Transparency, transparency, transparency

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Volume

• The wrong approach
• Perform unnecessary procedures to increase volume
• The right approach
• Encourage more volume by achieving excellent
  outcomes and making sure health plans and
  consumers know about performance
• Answer the following questions
• For what diagnoses and procedures do we have an
  excellent story to tell?
• How profitable are those diagnoses and
  procedures?
• How well do we fit pay-for-performance programs?
• Do we have a Center of Excellence?

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Mortality Rate

• The wrong approach
• Send the most severe patients elsewhere
• Discourage people with certain illnesses from
  coming to your hospital
• The right approach
• Identify diagnoses/procedures where have higher
  mortality rates than peers after severity
  adjustment
• Answer the following questions
• Is it just one or two physicians or a
  hospital-wide problem?
• Is it consistent across multiple years?
• Are too many physicians treating too few
  patients?
• Any particular patient characteristics of those
  dying?

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Complications

• The wrong approach
• Send the most severe patients elsewhere
• Stop coding complications
• The right approach
• Identify diagnoses/procedures where have higher
  complication rates than peers after severity
  adjustment
• Answer the following questions
• What complications are most prevalent?
• Are those complications physician or nursing care
  sensitive?
• Is it consistent across multiple years? Across
  physicians?
• How much more expensive are those patients with
  complications?

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Length of Stay

• The wrong approach
• Prematurely discharge patients
• The right approach
• Identify diagnoses/procedures where have higher
  length of stay than peers after severity
  adjustment
• Answer the following questions
• Is it time on the ICU or routine units?
• Is it consistent across multiple years? Across
  physicians?
• How much could be saved by reducing length of
  stay or reducing time in ICU?
• What of patients are short LOS patients
  (probably shouldnt have been admitted) vs. long
  length of stay patients?

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Cost

• The wrong approach
• Save by cutting quality of care programs
• Ignore cost of poor quality
• The right approach
• Identify how much more patients with quality
  problems cost across the hospital
• Answer the following questions
• What complications are costing the hospital the
  most?
• What programs are in place to curb those
  complications?
• What would be the potential ROI of a new quality
  program to reduce X complication by 1/3?

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Where should we be going?

• Quality is Not a Department
• Your organization will only make meaningful and
  sustainable quality improvements when people at
  every level feel a shared desire to make
  processes and outcomes better every day, in bold
  and even imperceptible ways.
• Robert Lloyd, Executive Director, Institute
  for Healthcare Improvement

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Where should we be going?

• Reducing medical error is everybodys business,
  including clinicians and the public.
  Accountability for what we do in in medicine is a
  cornerstone for the future construction of any
  delivery system. We need the energy of both the
  public and the private sectors to tackle this
  social challenge. How we tackle this matters
  less than the fact that we must tackle it now.
  Dr. David Nash, Jefferson Medical
  College, in March 2003 Health Policy
  Newsletter

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Where are we going?
If you dont know where you are going, youll
wind up somewhere else. Yogi Berra