Multi-stakeholder Payment Reform and System Redesign: Working Together to Improve Healthcare Value

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Multi-stakeholder Payment Reform and System
Redesign Working Together to Improve Healthcare
Value
Elizabeth Mitchell CEO Maine Health Management
Coalition
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Maine Health Management Coalitionwww.mhmc.info
The MHMC is a purchaser-led partnership among
multiple stakeholders working collaboratively to
maximize improvement in the value of healthcare
services delivered to MHMC members employees and
dependents.
The Maine Health Management Coalition Foundation
is a public charity whose mission is to bring the
purchaser, consumer and provider communities
together in a partnership to measure and report
to the people of Maine on the value of healthcare
services and to educate the public to use
information on cost and quality to make informed
decisions.
Collectively 35 of Comm. Market
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MHMC Value Equation

• quality / outcomes
• Value improved health
• employee satisfaction
• cost
• Best quality health care
• Best outcomes and quality of life
• Most satisfaction
• For the most affordable cost
• For all Maine citizens

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Maines Economy Has Moved From Manufacturing to
Healthcare
Manufacturing
Health Care
Manufacturing
Health Care
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Maine Has 5th Highest Insurance Premiums in U.S.
For Singles
Maine
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20-25 of Chronic Disease Admits Return Within 30
Days
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Maine Has 3rd Highest Rate of Surgeries in U.S.
Maine
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But Inpatient Utilization Is Low, Meaning
Cost/Day is Higher
Portland
SourceCommercialCostVariationbyHospital Refe
rralRegion,MillimanAugust 2010
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Spending on Physicians is Below Average
Portland
SourceCommercialCostVariationbyHospital Refe
rralRegion,MillimanAugust 2010
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Multiple Cost Drivers Require Multiple Strategies
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4 Steps to Improving Health Care Value

• Performance Measurement and Public Reporting
• Consumer Engagement
• Value Based Purchasing
• Reformed Payment/Effective Incentives

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Accountability Requires Transparency

• Meaningful system performance measurement and
  public reporting is necessary for accountability
  to purchasers, patients and community.
• Transparency of cost, resource use and
  appropriateness
• Transparency of utilization rates and patterns
• Transparency of patient outcomes and experience
• Transparency of quality and safety

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Employer Use
Employer Use

• State of Maine Tiered Networks
• Hospital based on PTE Metrics - 2006
• Added cost of care w/ quality Aug 2011
• PCPs based on PTE Metrics - July 2007
• Other Employers/Plan Sponsors
• Jackson Lab and Barber Foods January 2011
• U Maine System January 2012
• MMEHT January 2012

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Employer Use
Employer Use

• Employer members choose if/how to use performance
  measures
• Consistency across employers preferred by
  providers
• Gradual raising of the bar on performance
• Transparent, multi-stakeholder process important
  to employees and providers
• Threshold Achieving minimum of Good in every
  category (only quality/safety for 5 years)

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Employer Use
Employer Use

• Exceptions made for ACO pilots Higher value
  initiatives
• MaineGeneral - Cary
• PenBay - SMMC
• Drove provider and employer engagement on
  delivery system and payment reform
• RFP for direct contracts JAX
• Network Design MaineSense

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Cost Variation
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Publishing Hospital Costs

• How the data is used is what matters
• Without tiering Low cost hospitals negotiated
  higher rates
• With tiering High cost hospitals renegotiating
  lower rates to be included in network (4.7)

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If food prices had risen at medical inflation
rates since the 1930s. Source American
Institute for Preventive medicine
2009
1 dozen eggs 85.08
1 pound apples 12.97
1 pound sugar 14.53
1 roll toilet paper 25.67
1 dozen oranges 114.47
1 pound butter 108.29
1 pound bananas 17.02
1 pound bacon 129.94
1 pound beef shoulder 46.22
1 pound coffee 68.08
10 Item Total 622.27
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• Employee engagement curriculum to develop optimal
  incentives and engage patients in their role to
  improve their health and healthcare
• Module 1 Examining What You Have, Determining
  What You Want 
• Module 2 Bright Spotting Best Practice
  Locally, Regionally and Nationally
• Module 3 Securing High Quality Healthcare
  Services
• Module 4 Preventing Poor Health
• Module 5 Monitoring Your Benefits Package to
  Assure the Best Value for Benefit Dollars

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Some Feedback

• I am part of labor representing about 360
  members.  My members can not afford a healthcare
  plan that does not give them the best possible
  outcome or quality of care. The classes have
  taught me the buying power of our group. We
  should not pay for bad results or poor quality of
  service. As consumers, we need to be more
  pro-active in our healthcare.
• - City of Portland Employee
• Before I learned about the work of the
  Coalition, I thought the only thing I could do
  about healthcare was complain.
• - Prof. Arthur Hill, UMaine Employee

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Accountable Benefit Design
Option Explanation/Rationale
Incent Selection of PCP provider in ACO If primary care is to be foundation of ACO, plan must encourage use of selected practices
Incent PCP visits v. ER visits Establish significant differential to obtain care at PCP or network urgent care
Incent compliance with preventive care 100 coverage or preventive services and age-sensitive screenings linked to health credit
Incent participation in practice based care management Waive all co-pays for participation in practice based care management for members with chronic conditions
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You Get What You Pay For

• Employers Want
• Informed Employees
• Improved Outcomes
• Care Coordination
• Prevention
• Functional Status
• Return to Work

• Employers Pay For
• Tests
• Visits
• Procedures
• Prescriptions
• Errors Complications

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Dr. Steele The Way YOU Pay is Major Part of
Problem!
LOSE
LOSE
ER
LOSE
LOSE
Rests on the head
??

of a pin


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Example Maines Transition to Global Payments
ACOs
PURCHASERS
PROVIDERS
FACILITATOR
State Employees HealthCommission and UMS
Maine General Health
MaineHealthManagementCoalition
Data
TechnicalAssistance
Bath Iron Works
MidCoastHealthSystem
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Choosing a Starting Point in Moving to
Higher-Value Care
ServicesWith Evidence of Over-Utilization
ConditionsAffectingMany Patients
BestOpportunities forShort-TermSignificantSuc
cess
Low-CostInterventionsWith SignificantShort-Term
Impact
Willingand Able ClinicalLeadership
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Payment Reforms Needed that Support Care Changes

• Its not about risk or incentives, its about
  giving healthcare providers the
  ability/flexibility to improve outcomes and
  reduce costs in a way that is financially
  feasible
• Desired changes in care should drive payment
  reforms that support them, not the other way
  around
• Principal Tools
• Episode-of-Care Payment
• Risk-Adjusted Global Payment

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Payers Need to Truly Align to Allow Focus on
Better Care
Payer
Payer
Payer
BetterPaymentSystem B
Better Payment System A
Better PaymentSystem C
Provider
Patient
Patient
Patient
Even if every payers system is better than it
was, if theyre all different, providers will
spend too much time and money on administration
rather than care improvement
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Many Changes in Care Needed to Achieve
Significant Savings
Category of Spending ProjectedSpending Change in Utilization Savings
Advanced Imaging 971,879 -20 (194,376)
ER Utilization 755,969 -15 (113,395)
ACSC Hospitalizations 2,380,536 -40 (952,214)
Back Surgeries 506,451 -10 (50,645)
CABGs 546,673 -10 (54,667)
Other Hospitalizations SNF 22,052,815 -3 (661,584)
Other Physician Services 13,320,298 0 0
Other Outpatient Services 4,527,880 0 0
Home Health, Hospice, DME 6,437,500 0 0
51,500,000 -3.9 (2,026,882)
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Identifying Opportunities and Strategies for
Win-Win Savings

• Questions to Address
• Is this a desirable opportunity to pursue?
• Does the opportunity vary among regions or among
  employers?
• What are the barriers and how could they be
  overcome?
• What does each stakeholder need to do differently
  to support success?
• Employers/Medicaid
• Health Plans
• Hospitals
• Physicians
• Consumers/Patients/Families
• What additional information is needed to develop
  the business case for a win-win-win approach and
  implement the changes?

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Who, What and How?

• Employers
• Patient Incentives through Benefit
  Design/Wellness
• Informed purchasing with performance data
  reward high performance
• Payment reform pay for what we value (PCMH)
• Providers
• High-value, coordinated, patient centered care
• Shared Decision Making
• Increase primary and effective care/Decrease
  services of limited value
• Transparent cost and quality information
• Health Plans
• New roles, products and reimbursement systems
• Patients
• Informed choice and engagement to seek
  appropriate care
• Awareness of risks/benefits with reliable
  information
• Personal health responsibility

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Key Next Steps

1. Access and use your data
2. Identify key cost drivers
3. Quantify and prioritize opportunities
4. Build partnerships with providers
5. Set clear goals with physician leaders to change
   care delivery and lower cost
6. Do your part- benefit design/reimbursement
   changes to support accountable care

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Key Next Steps

• 4. Expect Accountability
• Review transparent data - monitor impact
• Reward success
• If progress is not made, act

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