quality and incentives: value-based purchasing, pay for performance and transparency
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Tom Williams Executive Director Integrated Healthcare Association The Quality Colloquium. Quality and Incentives: Value-Based Purchasing, Pay for Performance and Transparency. August 20, 2008. National Leadership. HHS Secretary Leavitt inspired Executive Order 13410 Four cornerstone goals - PowerPoint PPT PresentationTRANSCRIPT
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Quality and Incentives: Value-Based Purchasing, Pay for Performance and
Transparency
Tom WilliamsExecutive Director
Integrated Healthcare Association
The Quality Colloquium
August 20, 2008
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National Leadership• HHS Secretary Leavitt inspired
Executive Order 13410• Four cornerstone goals
- Interoperable Health IT- Transparency of Quality Measurements- Transparency of Pricing Information- Promoting Quality & Efficiency of Care
• Ultimate Goal: “A Change in Culture”
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Source: The New Yorker, March 17, 2008
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IHA Sponsored California Pay for Performance (P4P) Program
Health Plans:• Aetna• Blue Cross• Blue Shield • Western Health
Advantage
Medical Group and IPAs:• 230 groups • 35,000 physicians
* Kaiser participates in the public reporting only
12 million HMO commercial enrollees
• CIGNA• Health Net of CA• Kaiser*• Pacificare/United
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California Pay for Performance: Summary of Performance Results• Clinical: continued modest improvement on most
measures − 5.1 to 12.4 percentage point increases since inception of
measure• Patient experience: scores remain stable but show no
improvement• IT-Enabled Systemness: most IT measures are improving
− Almost two-thirds of physician groups demonstrated some IT capability
− Almost one-third of physician groups demonstrated robust care management processes
Continued performance improvements but
“breakthrough” point not achieved yet.
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Lesson• Wide variation
across regions exists; contributes to overall “mediocre” statewide performance
• Big gains possible with focused attention on certain regions
P4P Response• Pay for and
recognize improvement (20% of payment for 2007)
• More fundamental change in calculus of payment for improvement for 2008/09
California Pay for Performance:Regional Variability in Quality
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California Pay for Performance: Clinical Performance Variation
505560657075808590
Inland EmpireLos AngelesCentral CoastCentral ValleySan DiegoOrange CountyBay AreaSacramento/NorthStatewide
MY 2006 Results by Region
Top Performing Groups
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California Pay for Performance:A Tale of Two Regions
Inland Empire Bay Area
PCPs/100K Pop. 53 116
% Pop. Medi-Cal 17% 12%
% Hispanic 43% 21%
Per Capita Income $ 21,733 $ 39,048
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60
65
70
75
80
85
90
Inland Empire Bay Area
All Groups
Top PerformingGroups
P4P
Perf
orm
ance
Sco
re
Clinical Performance
California Pay for Performance:A Tale of Two Regions
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Are Quality Variations Correlated with Physician Reimbursement Disparities?
The data and subjective experience suggest:
Physicians in geographies with low socioeconomics receive disproportionately lower reimbursement across their practice, resulting in diminished physician and organizational capacity, reducing both access and quality of healthcare, even in a uniformly, well-insured population.
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P4P Quality Payment Incentives• Fundamental reimbursement disparities
appear to be the main culprit; however P4P should at a minimum not increase reimbursement disparities
• Payment for absolute and relative performance should be balanced with payment for improvement
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Paying for Improvement
Survey Response: What % of total bonus payments by health plans should be allocated to improvement vs. relative performance? (n=200, IHA Stakeholders meeting, 10/4/07)
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Paying for Performance & Improvement
Earning Quality Points ExampleMeasure: Pneumococcal Vaccination
Attainment Threshold.47
Benchmark.87
Attainment Threshold.47
Benchmark.87
Attainment Range
performance
Hospital I
baseline•.21.70•
Attainment Range1 2 3 4 5 6 7 8 9
Attainment Range1 2 3 4 5 6 7 8 9
Hospital I Earns: 6 points for attainment7 points for improvement
Hospital I Score: maximum of attainment or improvement= 7 points on this measure
Improvement Range1 2 3 4 5 6 7 8 9• • • • • • • • •
• • • • •
Score
Score
Excerpt from CMS Hospital Value-Based Purchasing Listening Session #2, April 12, 2007
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Transparency – Public Reporting
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www.opa.ca.gov
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California General Public Survey, conducted by Harris Interactive (12/07)
Hospitals
HealthPlans
Physicians
Saw Rating Information
23% 26% 22%
Based on these ratings, considered a change
2% 4% 5%
Based on these ratings, actually made a change
1% 1% 2%
Transparency – Public Reporting
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Rates for Hip RevisionsRates for Hip Revisions• Total hip revision rates (2006):
− National average: 18% − Kaiser Permanente: 12.8%− Sweden: 7%
Does this reflect more aggressive treatment, or less effective care?
Slide attributed to Thomas Barber, MD, Permanente Medical Group, presented at the CAHP conference, October 2006.
Transparency – Quality Improvement
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Countries with National Joint Countries with National Joint Replacement RegistriesReplacement Registries
• 1975: Sweden- Knees • 1975: Sweden-Hips • 1980: Finland • 1987: Norway • 1995: Denmark• 1997: Germany • 1999: New Zealand, Australia • 2001: Canada, Romania• 2003: England, Wales, Slovakia • 2004: Switzerland
Transparency – Quality Improvement
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Why doesn’t the U.S. have mandatory device
registries?
Transparency – Quality Improvement
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Healthcare as Percentage of GDP• 60%+ of NME passes through public
sector budgets (CMS, public employees, tax breaks, etc.)
• Healthcare at 16.3% of GDP (2007)• Therefore, about 10% of GDP is
healthcare spend passing through public sector budgets (.6 x 16.3% = 9.8%)
Cost and Quality
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• Total tax revenues in U.S. (federal, state, local) equals about 28% of GDP
• So, healthcare uses about 1/3 of public sector budgets (.098/28% = 35%) and growing!
• Healthcare at 20% of GDP = 43% of public sector budgets
Healthcare as Percentage of GDP
Cost and Quality
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Example: Michigan “Checklist”: • Over 18 months, reduced infections in
ICU by 66%• Estimated 1,500 lives saved• Estimated $100 million saved
Cost and Quality
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California Pay for Performance
For more information: www.iha.org (510) 208-1740
Pay for Performance has been supported by major grants from the California Health Care Foundation