Health Care Reform – the Purchasers Experience in Market Driven Solutions

Prepared for theHealth and Human Services Reform

CommitteeFebruary 2, 2011

The Buyers Health Care Action Group

A coalition of public and private purchasers of

health care

working together to change the health care system

so consumers will get the care they need

in the right place,

at the right time and

at the right price.

BHCAG MembersEmployer Members

Best Buy Company BlueCrossBlueShield of MN Cargill Carlson Companies G&K Services General Mills Health Partners Honeywell Jostens Land O’ Lakes 3M Company Medica Medtronic MN Gastroenterology MN Management and Budget Olmstead County Park Nicollet Health Services Rosemount, Inc. Resource Training and Solutions

Employer Members Securian Financial Group SUPERVALU Target Corporation University of Minnesota University of Minnesota Physicians US Bank Wells Fargo

Affiliate Members Abbott Laboratories Accuray AstraZeneca GlaxoSmithKline Merck&Company Novartis NovoNordisk Pfizer, Inc. sanofi-aventis

BHCAG - Defining VALUE in Health Care

Using our collective influence, BHCAG advocates for change using market forces….

Aligns purchasers around value based decision making when buying health care

Requires that health plans demonstrate unique value in the supply chain

Holds providers accountable for quality of care and allows them to compete based on the value of that care

Gets consumers engaged and empowered to value good health and make sound health care decisions

Purchasers

Government•Medicare•Medicaid•State, County,

Local

Private Employers

Individuals

Brokers

Agents

Health CareAdministrators

Pharmacy

Primary Care Doctors

Specialty Care Doctors

Hospitals

Diagnostic ImagingLaboratory Tests

Health CareProviders

Buyers Health Care Action Group

Bridges to Excellence (Pay for Performance)

Leapfrog SurveyAdverse Events

eValue8 Survey

Health Care System

• Transparency₋ Quality₋ Cost

Health Plans

Cost Management ToolsDisease Management

Health CoachingShared Decision Making

Care ManagementBehavioral Health Management

Biometric TestingHealth Assessment

Past Market Drivers•Choice Plus Health Plan•National Data Cooperative•Smart Buy Alliance

Services PurchasedPhysician – 30.6%

Inpatient Hospital – 17.9%Outpatient – 13.3%

Other Health Professional – 3.6%Pharmacy, Non-Durables –

14.7%Mental Health/Chemical Dependency – 3.1%

Emergency – 2.4%Skilled Nursing Facilities – 1.1%

Home Health Care – 1.1%Administrative Expenses

& Taxes – 9.4%

Goals of MN Bridges to Excellence

Improve the quality of care for patients with diabetes, vascular disease and/or depression

Raise the level of purchaser and consumer awareness about the variation in the quality of care

Spark provider competition based on quality outcomes Provide people with information so they can get the

best care for their condition

Impact on Clinical Outcomes:Optimal Diabetes Care Scores (2005 – 2010)

Fairview Allina MN Average

2004 & 2005 – Medical Group Level Data from Health Plans2006, 2007, 2008, 2009 – Clinic Level Data through DDS;

2009 A1c<8; all others years A1c<7

Goals of eValue8 Survey

Provide Consistent, Evidence-based, Health Plan Assessment– Allow for comparisons within and across markets– Measure factors that drive downstream direct and indirect costs – Reveal best practices and set benchmarks

Align Purchaser Standards and Expectations– Increase the signal strength for desirable plan capabilities and investments– Reduce the chaos of hundreds of purchaser requests for information– Align with major public purchasers: Medicare, Federal Employees

Pay for Performance– Basis for year-over-year improvements for selected plans– Basis for performance guarantees, contract monitoring– Basis for employee incentives (payroll contributions)

Impetus for Community-Based Improvement

eValue8 Results

Nat’lNat’l

eValue8 Results

Nat’lNat’l

Goals of Leapfrog and Adverse Events Reporting

Reduce preventable medical mistakes and improve the quality and affordability of health care

Encourage hospitals to publicly report their quality and outcomes so that consumers can make informed health care choices

Reward hospitals for improving quality, safety and affordability of health care

Help consumers reap the benefits of making smart health care decisions

Leapfrog Results

Other market driven successes

Choice Plus - the first consumer directed plan in the nation using consumer choice, increased provider competition and improved quality as core tenets. Current State Employee Plan is modeled after Choice Plus. Also offered as part of Medica’s product portfolio and an innovative offering by health plans across the country. Seen as a model for health care delivery reform.

National Data Cooperative – a collaborative created to aggregate health information on behalf of purchasers for more rational and informed purchasing. Now a national employer initiative managed by Towers-Watson.

Smart Buy Alliance – originally the Broad Alliance of Purchasers, the group was formed to unite all purchasers- public, private, small, large, non-profit, for-profit and Taft-Hartley plans – around a common purchasing goal: VALUE.

Using purchasing behavior to move the market

The State of Minnesota is the largest purchaser of health care Purchasers, through Value Based Purchasing, can hold the

“system” accountable for efficient, high quality and transparent performance

Purchasers, public and private, must align performance expectations to eliminate waste and redundancy

Require transparency at all levels in the supply chain– Bridges to Excellence – 593 clinics reporting; significant performance

improvement in 5 years– Leapfrog – 100% hospital participation in 2004. 16% reporting in 2010– eValue8 – 100% participation in 2008. 50% reporting in 2010

For more information

Carolyn Pare

CEO

Buyers Health Care Action Group

7900 International Drive Suite 1080

Bloomington, Minnesota 55425

cpare@bhcag.com

952 896 5185