community dialogue: health care waste, overuse and high cost november 29, 2012

Community Dialogue:Health Care Waste, Overuse and

High Cost

November 29, 2012

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State Employee Group Insurance Program (SEGIP)

50,000 Employees1120,000 lives covering Judicial, Executive & Legislative Branches

$1.5 billion biennial budget

Largest employer group in the state

1,200 clinics

55 care systems

90% Union

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What is Health Care Waste to an Employer?

Anything that doesn’t result in a more productive employee!

Why does an Employer offer Benefits?

• To recruit and retain employees

• To maintain a healthy and productive workforce

60% of MN citizens receive health care through an employer

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Where Does Waste Occur?

As a purchaser waste occurs in 3 areas:

1.The care and management of a chronic condition

2.The care and management of acute care

3.The achievement of either by an employee

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*The Triple Aim: Care, Health, And Cost. Berwick DM, Nolan TW and Whittington J., Health Affairs, May 2008, Vol. 27, No. 3, 759-769.

• Never Events and Hospital-Acquired Conditions (e.g. falls, medication errors, infections)

• Other Potentially Preventable Events (Admits, ED visits)

• Increase best practices (ICSI Guidelines, LBP, elective inductions, C-sxns)

• Never Events and Hospital-Acquired Conditions (e.g. falls, medication errors, infections)

• Other Potentially Preventable Events (Admits, ED visits)

• Increase best practices (ICSI Guidelines, LBP, elective inductions, C-sxns)

• Care coordination, care management• HealthCare Homes• RARE• “SuperUtilizers”• Palliative Care, LiLLIE• Shared Decision Making• Primary-Specialty Care Communication &

Coordination

• Care coordination, care management• HealthCare Homes• RARE• “SuperUtilizers”• Palliative Care, LiLLIE• Shared Decision Making• Primary-Specialty Care Communication &

Coordination

• End of Life Care• Decision support for HTDI• “Choosing Wisely”• Reduce redundant tests & procedures• Address supply-driven behaviors

• End of Life Care• Decision support for HTDI• “Choosing Wisely”• Reduce redundant tests & procedures• Address supply-driven behaviors

• Support MN’s AUC work• Redundancy in care

coordination/management among providers and health plans

• Promote HIT

• Support MN’s AUC work• Redundancy in care

coordination/management among providers and health plans

• Promote HIT

Wedge Model for US Health Care With Theoretical Spending Reduction Targets for 6 Categories of Waste

Graph Source: Eliminating Waste in US Health Care, Berwick, D., Hackbarth, A. JAMA. 2012;307(14):1513-1516

Potential Waste Reduction Efforts

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The MN Advantage Plan?

Health Plan Intervention (Health Plan Focus)

Provider Efficiency (Member Focused)

Care Coordination (Provider Focus)

Transparency/Pay for Performance

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Health Plan Intervention

Disease/Case Management

Step Therapies

Telephonic/Pharmacy based MTM

Health Assessments/Wellness

Original “waste management” strategies by employers

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Provider Efficiency

Provider Group

PMPM Cost

Provider Group

PMPM Cost

Provider Group

PMPM Cost

Provider Group

PMPM Cost

A $332.27 N $377.92 BB $417.18 OO $456.87B $346.70 O $386.02 CC $418.23 PP $457.16C $347.74 P $386.23 DD $428.78 QQ $462.86D $349.75 Q $386.66 EE $429.48 RR $472.02E $350.07 R $389.44 FF $432.37 SS $481.37F $358.75 S $393.03 GG $438.77 TT $482.52G $360.19 T $393.81 HH $440.27 UU $483.27H $361.70 U $394.77 II $443.05 VV $513.06I $362.85 V $396.22 JJ $443.29 WW $516.58J $368.40 X $402.05 KK $443.74 XX $530.94K $371.09 Y $403.15 LL $446.47 YY $552.48L $372.33 Z $405.66 MM $447.26 ZZ $562.98M $374.33 AA $410.97 NN $449.16 AAA $575.40

Level 2Level 4

Level 3

Level 1

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Provider Efficiency

Tiered Networks – rewards providers who demonstrate value

Center of Excellence – reward systems who out perform on certain conditions

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Care Coordination

Primary Care Based Tiered Networks – Every member selects a PC facility

Provide Specific Health Care Home payment for those that qualify

DIAMOND participant

ACO Contracting – care coordination part of ACO value

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Transparency/Pay for Performance

BTE/QIPS – Champions of Change

MNCM quality reporting integration

Consumer Reports

ICSI – Affordability Advisor

MDH – PPG Advisor

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Where do we go from here?

Continue to measure and reward provider performance

Expand BTE/QIPS

Publish PPG

Meaningful ACO discussions

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Where do we go from here?

Start to measure and reward health plan performance

Pay for completion, engagement and outcomes of health services

Measure impact on health of members

Health Task Force recommendation to only contract with result oriented health plans

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Where do we go from here?

If costs are not contained and health not improved employers will have no choice but to select narrow networks of providers and question the value of health plans in the supply chain management of health care delivery.

or stop offering employer benefits altogether

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Contact

Nathan Moracco, Directornathan.moracco@state.mn.us(651) 259-3720