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SOA 2012 Annual Meeting & Exhibit October 14-17, 2012
Session 49 PD, Trend—Future Drivers and
Bending the Cost
Moderator: John Patrick Kinney III, FSA, MAAA
Presenters:
Matthew Peter Day, FSA, MAAA Carol Simon, Ph.D.
Dale H. Yamamoto, FSA, EA, FCA, MAAA
Primary Competency Strategc Insight & Integration
1
Trend—Future Drivers and Bending the Cost Curve
Society of Actuaries 2012 Annual Meeting
Session 49Session 49
October 15, 2012
1
About The Health Care Cost Institute (HCCI)
• HCCI is a non‐profit, independent, non‐partisan research institute
– Provide most comprehensive source of information on health care activity
– Promote research on the drivers of escalating health care costs and utilization
• Health Section breakfast (Session 124)Health Section breakfast (Session 124)
– Wednesday, October 17th
– 7:15 – 8:15 am
2
2
Background
• First report released on May 21, 2012– Primarily compared 2010 to 2009
• Second report released September 25, 2012– Primarily compared 2011 to 2010 – More data
– Additional data comparisons
• Key statistics byService category
3
– Service category
– Geography
– Age
Cost Change by Service
$748 $766 $773 $4,000
$4,500
$5,000
$4,190 $4,349$4,547
3.8%
2 4%1.0%
4.6%
$1,079 $1,165 $1,245
$1,476 $1,499 $1,566
$748 $
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2.4%
1.5%
8.0% 6.8%
4.5%
$887 $919 $963
$0
$500
2009 2010 2011
Inpatient Outpatient Professional Drugs
4
3.6% 4.8%
3
Cost Change by Geography
$4 574
$4,659
$4,591 $4,600
$4,700 (4.9%/yr)
(3.8/yr%)
(4 6/yr%)
$4,183
$4,368
$4,574
$4,238
$4,426
$4,262
$4,393
$4,194
$4,358
$4,100
$4,200
$4,300
$4,400
$4,500(4.6/yr%)
(3.8/yr%)
$4,043 $4,000
$ ,
2009 2010 2011
Midwest Northeast South West
5
Trend rates shown are average annual from 2009 to 2011.
Cost Change by Age
$8,139 $8,455 $8,776
$8,000
$9,000
$10,000(3.8%/yr)
$2,063 $2,178 $2,347
$3,368 $3,472 $3,599
$5,518 $5,680 $5,927
$1 000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000(3.6/yr%)
(3.4/yr%)
(6.6/yr%)$ ,063
$0
$1,000
2009 2010 2011
0‐18 19 ‐ 44 45 ‐ 54 55 ‐ 64
6
Trend rates shown are average annual from 2009 to 2011.
4
2009‐11 Trend Components
Per Capita
Cost Trend Price Trend
Utilization Price Paid Unit Price Intensity
Inpatient 4.2% ‐2.1% 6.5% 4.9% 1.5%
Outpatient visits 7.2% ‐0.3% 7.6% 7.5% 0.1%
Outpatient other 7.8% 2.7% 4.9% 4.1% 0.8%
Professional 3.0% 0.6% 2.4% 3.1% ‐0.7%
Prescriptions –Day’s Supply
1.7% ‐0.1% 1.8% 7.0% ‐4.9%
General CPI‐W 2.8%
7
Note: Drug price trend shows unit price change with 2009 utilization and intensity is mix between brand and generic utilization (i.e, mix).
Inpatient per Capita
$1,000
$1,200
$$963 Overall (4.2%/yr)
$400
$600
$800
$887
Surgical (3.7%/yr)
SNF (5.0%/yr)MHSA (17.7%/yr)
$0
$200
2009 2011
Maternity (7.1%/yr)
Medical (2.7%/yr)
8
5
2009‐11 Trend Components
Per Capita
Cost Trend Price Trend
Utilization Price Paid Unit Price Intensity
IP‐MHSA 17.7% 8.6% 8.3% 9.2% ‐0.8%
IP‐Maternity 7.1% 1.0% 6.1% 0.9% 5.1%
9
Outpatient per Capita
$1,200
$1,400
$1,079
$1,245 Overall (7.4%/yr)
Other (17.3%/yr)
$400
$600
$800
$1,000
$1,079
Ancillary (5.6%/yr)
OP Surgery (7.1%/yr)
Radiology (3.1%/yr)
Lab/Path (4.6%/yr)
$0
$200
2009 2011
ER (7.5%/yr)
Observation (6.3%/yr)
10
6
2009‐11 Trend Components
Per Capita
Cost Trend Price Trend
Utilization Price Paid Unit Price Intensity
Emergency Room 7.5% ‐0.6% 8.1% 8.1% 0.0%
Other services 17.3% 7.7% 8.9% 3.9% 4.8%
11
Professional per Capita
$1 400
$1,600
$1,800
$1,476$1,566 Overall (3.0%/yr)
Surgery (2 6%/yr)
$600
$800
$1,000
$1,200
$1,400 Surgery (2.6%/yr)
Other (1.7%/yr)
Prev‐SCP (3.6%/yr)Prev‐PCP (7.6%/yr)
OV SCP (8 8%/yr)
Lab/Path (5.3%/yr)
Radiology (‐4.0%/yr)
$0
$200
$400
2009 2011
Admin Drugs (8.2%/yr)
OV‐PCP (1.3%/yr)Anesthesia (5.1%/yr)
OV‐SCP (8.8%/yr)
12
7
2009‐11 Trend Components
Per Capita
Cost Trend Price Trend
Utilization Price Paid Unit Price Intensity
/Lab/Path 5.3% 2.4% 2.7% 1.1% 1.6%
OV‐SCP 8.8% 3.7% 4.9% 3.2% 1.6%
Admin Drugs 8.2% 0.8% 7.3% 6.9% 0.4%
13
Prescription Drugs per Capita
$700
$800
$900
$748$773 Overall (1.7%/yr)
Other (19.9%/yr)
$300
$400
$500
$600
$700
Brand (4.7%/yr)
Generic (‐4.7%/yr)
$0
$100
$200
2009 2011
14
8
2009‐11 Trend Components
Per Capita
Per Capita Number of Scripts/1000
2009 2011 2009 2011
$ $Brand 4.7% $478 $523 2,370 1,950
Generic ‐4.7% $262 $237 6,908 7,197
Total * 1.7% $748 $773 9,347 9,246
Percent of Total
Brand 64% 68% 25% 21%
Generic 35% 31% 74% 78%Generic 35% 31% 74% 78%
Total * 100% 100% 100% 100%
15
* Note: Numbers do not add up as a small percentage of drugs were uncategorizable.
2009‐11 Trend Components
Script Cost Change
Cost per Script Number of Scripts/1000
2009 2011 2009 2011
$ $Brand 15.4% $202 $268 2,370 1,950
Generic ‐6.7% $38 $33 6,908 7,197
Total * 2.2% $80 $84 9,347 9,246
Total w/ 2009 weights
7.9% $80 $93
16
Note: Numbers do not add up as a small percentage of drugs were uncategorizable.
The total with 2009 weights is based on number of prescriptions. The adjusted cost trend shown on page 7 is based on days supply. Therefore, the above price includes a change in number of days supply per prescription.
1
Can we slow the drivers of health care costs?Carol J. Simon, SVP and Director Optum Institute
Reform creates new challenges to cost control2014 Growth Rates by Selected Sector, Before and After the Impact of the Affordable Care Act.
Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 2
Keehan S P et al. Health Aff 2011;30:1594-1605
SOURCE Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group
2
In the next 2‐3 years the health care system will be
Sustainable?
33%
33% 39%
21%
26% 25%
48%
Better
Same
Worse
Not sure
B
C
Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 3
8% 13%1%
33% 23%31%
Physicians Consumers Hospital Executives
3
(A) (B)
C
(C)
Today’s Talk: Redirecting Cost Drivers
• Economic research on cost drivers
• Controllable vs non-controllable
How much of cost growth can be
t ll d? • Controllable vs. non-controllablecontrolled?
• Poor Health Behaviors
• Evidence-based practice
• Competition and Incentive alignment
• Waste and Fraud
Focus on controllable stuff:
SR vs. LR
• Value based paymentActions &
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• Delivery system redesign
• Health Information Technology
Actions &Evidence
3
Half of health care cost growth is potentially controllable, due to avoidable utilization and higher prices
Uncontrollable factors Controllable factors
Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 55
*Excess medical inflation is defined as increases in prices for health care services above the general inflation rate. Not all growth in utilization and intensity is excess although these costs may be controllable. The estimated split by excess medical inflation and utilization/intensity is based upon 2001-2008 data published by the Office of the Actuary, CMS.Source: The Lewin Group analysis of data from the Centers for Medicare and Medicaid Services, Office of the Actuary, 2005, 2010.
Optum examined distinct factors that drive our major cost-categories, reviewing 22 factors that contribute to controllable and uncontrollable costs
Uncontrollable FactorsPopulation demographics Aging/end of life
Controllable Care Management Factors Lifestyle factors
Controllable Market Competition Factors Pharmaceutical expendituresy
— Tobacco use— Obesity— Excess alcohol consumption
Care management processes— Preventable medical errors— Low use of evidence-based medicine— Inadequate disease management— Low use of medical homes— Lack of comparative effectiveness
research (CER)
p— Direct-to-consumer ads— Suboptimal use of generics— Lack of price negotiation
Hospital and insurer competition Cost shifting State mandates Malpractice
Controllable Transaction Factors Fraud, abuse, & billing mistakes
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research (CER) Low use of health information technology (HIT)
(portion of)
, , g Administrative/paperwork-related costs Low use of HIT (portion of)
Controllable Other Factors Technological changes/innovations Nursing shortage Provider salaries Uninsurance
Controllable Incentive Factors Excess consumption due to low cost sharing Higher prices due to over consumption Tax-subsidies for insurance Provider incentives under FFS
4
Current spending could be significantly reduced:align incentives, manage disease, promote competition and improve transactions
$2,600 $2 500
$3,000
$560 $
$1,000
$1,500
$2,000
$2,500
Sources of excess costs
ealt
h S
pen
ding
(billion
s)
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$160 $170 $220
$0
$500
National Health Expenditures
2010
Poor care management & lifestyle factors
Incentives to overuse services
Lack of competition &
regulatory factors
Excess costs due to inefficient transactions
He
Addressing the controllable factors that affect the burden of disease can yield potential savings of ~$560 billion annually
*Low/non use of comparative effectiveness research (CER)$21 billion Low use of health
i f ti t h l g (HIT)
Deficiencies in care coordination & disease management$27 billion
Preventable medical errors$48 billion
information technology (HIT)$24 billion
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Lifestyle factors(tobacco, alcohol, obesity)$442 billion
*Savings from use of CER are tied to use of economic incentives to comply with clinical guidelines Source: Lewin Group estimates
5
Addressing controllable factors that affect market competition yields savings of ~$160 billion annually
Hospital competition
M l ticompetition
38Malpractice
52
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Drug Policy, 29State
mandates41
9
Source: Lewin Group estimates
Increasing concerns: Health care competition vs. consolidation
Current Trends point to accelerating market consolidation:
• Uptick in physician group mergers, Physician-hospital alignment & acquisition
• Integration required for new delivery models, ACOs
Lack of competition is estimated to add 5% to hospital prices nationally, or $38 billion, annually
• Impact is higher in the least competitive markets, raising hospital prices 30% or more above competitive norms
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more above competitive norms
10
Source: Ginsburg PB et al. Tracking health care costs: continued stability but at high rates in 2005. Health Affairs, 2006;Web exclusive:W486-495. Catlin A et al. National health spending in 2005: the slowdown continues. Health Affairs, 2007;26(1):142-153. Vogt WB et al. How has hospital consolidation affected prices and quality? Robert Wood Johnson Foundation, Research SynthesisBrief # 9; February 2006.
6
Addressing incentives that result in higher utilization and prices can save ~$164 billion (6% of projected 2010 NHE)
Higher prices
*Incentives can include agency costs, moral hazard, and tax preferences
Excess utilization due to poor incentives$116 billion
due to perverse incentives$48 billion
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• Provider-related excess costs (agency costs) exist in fee-for-service systems such that certainincentives prompt health care providers to provide excess services
• Consumer-related costs (moral hazard) also may exist as health insurance insulates patients and providers from the true cost of services which can lead to some excess use
• Tax incentives may encourage employers to purchase more coverage, contributing to higher use and prices
l
Improving transactions can yield potential savings of $220 billion (8.5% of projected 2010 NHE)
Fraud and abuse$169 billion
Administrative/paperwork costs*
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p p$51 billion
*Administrative costs refers to billing and insurance-related costs (BIR), including the cost of billing errorsSource: Lewin Group Estimates
7
How to get there?-- Value based payment reforms-- Delivery system redesign-- Delivery system redesign-- Transparency-competition-- Evidence-based practice & HIT
Two complementary approaches to promoting value
# C
ases
Outliers Outliers
# C
ases
Quality
Confidential property of Optum. Do not distribute or reproduce without express permission from Optum.
Quality Quality
Improve performance distribution: Shift patient flows to high performers
Require measurement, incentives and transparency
8
Improving performance by promoting Centers of Excellence
139 Adult Heart Transplant Centers Volume & Survival Rate
90%
100%
Su
rviv
al P
erce
nta
ge
30%
40%
50%
60%
70%
80%
90%
1 Year Survival Percentages
87% 87%
65%
79%
65%
70%
75%
80%
85%
90%
Ye
ar
Pa
tie
nt
Su
rviv
al
Per
cen
tag
e
Confidential property of Optum. Do not distribute or reproduce without express permission from Optum.
Number of Heart Transplants
Non-Network In Network
0%
10%
20%
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95
60%Mean Median1
Y
U.R.N. Network CtrsAll Other Centers (Not Including U.R.N. Ctrs)
Promoting Quality & Cost TransparencyUnitedHealth Premium® Designation
Quality First plus Cost Transparency• Designates physicians on quality and efficiency• Longest running designation program (since 2005)• National industry, evidence-based and medical specialty society
standards are sed to e al ate indi id al ph sicians on more thanstandards are used to evaluate individual physicians on more than 75 conditions and 300 measures
• Quality first: Only physicians who meet the quality designation criteria are eligible for cost efficiency designation
Access• 145 markets and 21 specialties account for more than 50% of all
medical costs; includes Primary Care Physicians and Specialists
Broad Application
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Broad Application• Available to all members at no additional cost – designations
integrated into all customer service, clinical, and online experiences• Benefit designs based on UnitedHealth Premium® designation
9
Variation in Quality and Efficiency Episodes Are Measurable
115
120Less expensive &
better qualityExpensive &better quality
Qu
alit
y S
core
90
95
100
105
110
Confidential property of Optum. Do not distribute or reproduce without express permission from Optum.
Efficiency (Cost Compared to Market Average)
80
85
90
-0.8-0.6-0.4-0.200.20.40.60.8
Less expensive &poorer quality
Expensive &poorer quality
Consumer Designation Display on myuhc.com
UnitedHealth Premium® Quality and Cost Efficiency criteria met
UnitedHealth Premium® Quality criteria met
Not Enough Data to Assess
Not Displayed Upon Physician Request
Not Evaluated
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Physicians receive benchmarking report
18
10
Average savings from using doctors designated for Quality and Efficiency in UnitedHealthcare’s Premium Designation Program
Confidential property of Optum. Do not distribute or reproduce without express permission from Optum.
Translates to 1-3% cost savings for employersSource: UnitedHealthcare Premium Designation Program.
Payment reform strategies involve varying level of risk and integration
Compensation Continuum(Level of Financial Risk)
Small % of financial risk Large % of financial riskModerate % of financial risk
Performance-
Limited Integration Full IntegrationModerate Integration
Fee-for-service
based Contracting
• Physician• Hospital
Patient-centered Medical Home
Bundled and
Episodic Payments
Shared Savings
Shared Risk Capitation
Capitation + Performance-
based Contracting
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UnitedHealth is working to deploy a variety of options with its network providers based on their readiness to accommodate varying levels of risk
11
Move to more value based payment models?
Fee-for-service payment encourages the use of more services or more expensive services
While many physicians believe FFS encourages the use of more services or more expensive services, few are eager to adopt incentive-based pay
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Source: UnitedHealth Center for Health Reform & Modernization / Optum Institute / Harris Interactive survey of physicians, hospital executives, and consumers, June 2012.
Physicians are concerned about the risk associated with capitated payments
Capitated payments shift too much risk to providers
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Source: UnitedHealth Center for Health Reform & Modernization / Optum Institute / Harris Interactive survey of physicians, hospital executives, and consumers, June 2012.
12
Physicians are familiar with “bundled” or “episode-based” payments but many are reticent to participate in them
How interested would you be in participating in a 'bundled' or 'episode-based' program?
How familiar are you with proposals to create 'bundled' or 'episode-based' payments?
© 2012 UnitedHealth Group. Any use, copying or distribution without written permission from UnitedHealth Group is prohibited. 23
Source: UnitedHealth Center for Health Reform & Modernization / Harris Interactive survey of physicians, hospital executives, and consumers, November 2011.
Evidence on savings from delivery system redesign pilots is mixed
• CMS Physician Group Practice Demo – Uneven savings across participants; from savings of ~$800 to
increased spending in some groups
– Evidence of savings among chronic, high cost patients ~$500, annually (JAMA 2012)
– Modest improvements in quality
• ACOs – too new to evaluate – Efficiency vs. market power concerns as physician-hospital
consolidation increases
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• Primary Care Medical Homes
– Mixed results: savings of 2—8% costs, depends on population
– All models require practice transformation and investment to manage clinical and financial risks
13
The Future Holds More Risk: Shift from volume to value
Acceptance of Performance-Based Risk in the Next 10 Years
15%
7%18%
More than 50% of overall
16%
35%
42%
22%
More than 50% of overallreimbursed services
26-50% of overallreimbursed services
10-25% of overall reimbursed services
Less than 10% of overallreimbursed services
Not sure
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Note: This question was not asked among ConsumersBase: All Qualified Respondents: (Physicians n = 1,000, Hospitals n = 400)Q1010/5010 Within the next ten years, I predict practices/hospitals in my community will accept performance-based risk on….
Physicians(A)
Hospital Executives(C)
27%
3%
15%
Not sure
The Incentive Alignment OpportunityThe Challenge of Managing Financial Risk
Preparation for Greater Responsibility
for Managing Patient Care
Preparation for Greater Financial Risk
for Managing Patient Care
3%1%
6%1%
3%3%
49%
29%
11%3%
17%
53%
23%
6%
18%
37%
49%
27%27%
8% 12%3%%
C
C
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Note: This question was not asked among ConsumersBase: All Qualified Respondents: (Physicians n = 1,000, Hospitals n = 400)Q1025/5035 How prepared are physician practices/hospitals in your community to assume…?
Physicians(A)
Hospital Executives(C)
Physicians(A)
Hospital Executives(C)
7%17%
7% 9%
Extremely prepared Very prepared Prepared Somewhat prepared Not at all prepared Not sure
C
14
"The significant problems we face cannot be solved at the same level of thinking we were at when we created
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27
when we created them."
- Albert Einstein (1879-1955)
Thank You
Contact:
Carol J. Simon, PhD | Director, Optum Institute
952-936-1602 | [email protected]
1
Advancing the Twin Goals of Improving Health Care Quality While Slowing Spending Growth:BCBSMA’s Alternative Quality Contract (AQC)
Matthew Day, FSA, MAAA
Vice President & Senior Actuary
Blue Cross Blue Shield of MassachusettsBlue Cross Blue Shield of Massachusetts
AQC Overview
2
BCBSMA’s Highest Priority is toMake Quality Health Care Affordable
The most promising way to slow rising health care
costs is to enable the delivery system to improve the quality,
safety, and effectiveness of care. To address both cost and
quality, we need a health care system that
aligns financial and clinical goals
3Blue Cross Blue Shield of Massachusetts
aligns financial and clinical goals.
That’s why BCBSMA developed the Alternative Quality Contract (AQC).
Highlights of the AQC Model
Sustained partnerships
Global • Support collaboration between primary care and specialist providers
• Encourage investment in long-term quality initiatives
• Promote the integration and coordination of care
Global payment budgets
Performance incentives
• Robust, nationally accepted performance measure set creates accountability for quality, safety and outcomes across continuum
• Support collaboration between primary care and specialist providers and community and tertiary hospitals
• Reward efficient providers with increased margins
• Create opportunities for the implementation of alternate care delivery models (e-mail, group visits, etc.) and other innovations
4Blue Cross Blue Shield of Massachusetts
Network Support
• Provide comprehensive support to providers in the AQC contract by providing actionable data, financial reports, training, and collaborative opportunities, as well as communication and consultative support.
• Tie payments to achieving the goals of safe, effective, patient-centered care.
3
Financial Model Overview
1. Global Budget• Based on historical claims
• Includes members’ total medical expenses
2. Trended and Adjusted Annually• Trended at the network/region trend less a defined percentage
• Adjusted for relative change in health status and Rx benefit coverage
3. Surplus Opportunity• Annual, retrospective settlement of actual expenses to budget
5Blue Cross Blue Shield of Massachusetts
p p g
• Share of surplus/deficit dependent on quality score results
– Higher quality = greater share of surplus / lower share of deficit
4. Quality Performance Incentive• PMPM amount dependent on performance on broad set of quality measures
Global Budget
The AQC starts with a global budget based on the claims history of the members to be covered.
This “starts you where you are,” aiming to generate savings over time - no immediate shock to the system
AQC groups are large (35,000 average group, 7,000 minimum), so one year of claims is a stable base data set
• Analysis shows health status adjusted Total Med. Expense (TME) has low volatility at these sizes
Monte Carlo Simulation of Volatility in Adjusted TME at Various Group Sizes
1.2090% confidence
Th b d t i l d ll
6Blue Cross Blue Shield of Massachusetts
0.80
0.90
1.00
1.10
500 1,000 3,000 5,000 10,000 15,000 20,000 25,000 30,000 35,000
Members
80% confidence• The budget includes all
claims for the covered members, including those not provided by the AQC group
4
Trend Targets
AQC groups must perform better than average to earn a surplus on the efficiency program.
The global budget is trended at the network/regional trend, less a defined percentage
This high bar is balanced with the robust quality incentives available to the group• The focus is on quality + affordability
The network trend serves as an adjustment for macro changes to trend• Economic conditions, pandemics, etc.
Th d d ti i ti t d f t hi h t f th ’ t ti l ti
7Blue Cross Blue Shield of Massachusetts
The deduction is a negotiated factor, which can account for the groups’ starting relative cost and readiness for global management
Budget Adjustments
The goal is to retain insurance risk with the Plan; holding providers accountable only for what they can
The budget trend is adjusted for factors outside the groups’ control.
control
• Health Status
— Adjust for the groups’ change in health status relative to the benchmark change
— Initial health status level is embedded in the budget, but we adjust for changes
— More accurate concurrent models can be used due to the retrospective settlement
• Benefit coverage
— Adjust for the relative change in the proportion of the members with carved out Rx
8Blue Cross Blue Shield of Massachusetts
— Adjust for the relative change in the proportion of the members with carved out Rx
• Changes in the provider group
— Adjust if a large number of doctors are added or leave the group
• High Cost Claims
— Budget deduction taken and claims over an attachment point are reduced
5
What AQC Results are we Seeing?
Significant Growth in the AQC, 2009-2012(Current as of August 2012 )
In State HMO members of an AQC PCP
428,600
Sta
te H
MO
Mem
ber
ship
32%
43%649,425
77%In-State HMO members of an AQC PCP, membership may fluctuate
10Blue Cross Blue Shield of Massachusetts
359,000
328,000
In-S
26%
2009 201220112010
6
Year-one improvements in quality were greater than any one-year change seen previously in our provider network
AQC is Significantly Improving Quality
• Every AQC organization showed significant improvement on the clinical quality measures.
• Exceptionally high performance seen for all clinical outcome measures.
• There were no significant changes in AQC groups’ performance on patient care experience measures overall.
11Blue Cross Blue Shield of Massachusetts
Year two showed continued significant quality improvements among AQC groups relative to others
• Some groups are nearing performance levels believed to be “best achievable” for a population.
• Significant improvements occurred in patient care experiences, including improved doctor-patient communication, access to care and integration of coordination.
Year-One Results: Formal Academic Evaluation
12Blue Cross Blue Shield of Massachusetts
7
Year-Two Results: Formal Academic Evaluation
“Participation in the contract over two years led to over two years led to savings of 2.8% (1.9% in year 1 and 3.3% in year 2) compared to spending in nonparticipating groups…savings were substantially larger in the
13Blue Cross Blue Shield of Massachusetts
substantially larger in the no-prior-risk subgroup (8.2%).”
AQC is Significantly Reducing Costs
• BCBSMA is on track to reach our goal of reducing in half the rate of increase in health care costs over the five years of the original contracts.
In year two, savings were generated in three key areas:
1. Reduced inpatient admissions: The AQC trend for hospital admissions was more than 2% lower than for non-AQC providers—which equates to over 300 avoided admissions and a savings of around $6 million in costs.
2. Improved use of high tech radiology: AQC providers better managed the use of high-tech radiology, representing a savings of 1,500 unnecessary scans and $2 million
14Blue Cross Blue Shield of Massachusetts
g gy, p g g , yin avoided costs.
3. Using less costly settings for care: AQC groups continue to refer to high-quality, lower-cost facilities for basic tests and procedure. These changes resulted in $2.5 million in savings in 2009 and 2010.
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AQC Provider Innovations
Incentive Program for PCPs
Transitions in Care Initiative
Lipid Management Program
15Blue Cross Blue Shield of Massachusetts
Increased Use of Home Infusion Services
Improved Performance on Outpatient Quality
Concierge Managed Care Program
Provider Experience
“The way the AQC program allows the care team to deliver better care is it allows the primary care physician and other physicians to spend more time with the member….The amount of care that we’ve been able to give the chronic disease individuals…is keeping them out of the hospital more.”
Phil Gaziano, MDPresident, Accountable Care Associates
“The contract is a way to support us as a physician group to help provide better care for our patients and care at a lower medical expense ”
16Blue Cross Blue Shield of Massachusetts
medical expense.”Richard Lopez, MD
Chief Medical Officer, Atrius Health
Hear for yourself! Go to www.bluecrossma.com, select Visitor, and then click on: About Us>Making Quality Health Care Affordable.
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