Transcript williams_1a

Quality and Incentives: Value-Based
Purchasing, Pay for Performance and
Transparency
Tom Williams
Executive Director
Integrated Healthcare Association
The Quality Colloquium
August 20, 2008
National Leadership
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HHS Secretary Leavitt inspired
Executive Order 13410
Four cornerstone goals
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Interoperable Health IT
Transparency of Quality Measurements
Transparency of Pricing Information
Promoting Quality & Efficiency of Care
Ultimate Goal: “A Change in Culture”
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
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CIGNA
Health Net of CA
Kaiser*
Pacificare/United
Medical Group and IPAs:
• 230 groups
• 35,000 physicians
12 million HMO commercial enrollees
* Kaiser participates in the public reporting only
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California Pay for Performance:
Summary of Performance Results
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Clinical: continued modest improvement on most measures
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5.1 to 12.4 percentage point increases since inception of
measure
Patient experience: scores remain stable but show no
improvement
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IT-Enabled Systemness: most IT measures are improving
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Almost two-thirds of physician groups demonstrated
some IT capability
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Almost one-third of physician groups demonstrated
robust care management processes
Continued performance improvements but
“breakthrough” point not achieved yet.
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California Pay for Performance:
Regional Variability in Quality
Lesson
• Wide variation across
regions exists;
contributes to overall
“mediocre” statewide
performance
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Big gains possible
with focused
attention on certain
regions
P4P Response
• Pay for and recognize
improvement (20% of
payment for 2007)
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More fundamental
change in calculus of
payment for
improvement for
2008/09
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California Pay for Performance:
Clinical Performance Variation
90
Top Performing Groups
85
Inland Empire
Los Angeles
Central Coast
Central Valley
San Diego
Orange County
Bay Area
Sacramento/North
Statewide
80
75
70
65
60
55
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MY 2006 Results by Region
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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
California Pay for Performance:
A Tale of Two Regions
P4P Performance Score
Clinical Performance
90
85
80
75
All Groups
70
Top Performing
Groups
65
60
Inland Empire
Bay Area
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.
P4P Quality Payment Incentives
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Fundamental reimbursement disparities
appear to be the main culprit; however P4P
should at a minimum not increase
reimbursement disparities
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Payment for absolute and relative performance
should be balanced with payment for
improvement
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)
Paying for Performance & Improvement
Earning Quality Points Example
Measure: Pneumococcal Vaccination
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.87
Benchmark
Attainment Threshold
Hospital I
Attainment Range
Score
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.21
Score
baseline
.70
performance
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Attainment Range
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Improvement Range
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Hospital I Earns: 6 points for attainment
7 points for improvement
Hospital I Score: maximum of attainment or improvement
= 7 points on this measure
Excerpt from CMS Hospital Value-Based Purchasing Listening Session #2, April 12, 2007
Transparency – Public Reporting
www.opa.ca.gov
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Transparency – Public Reporting
California General Public Survey, conducted by
Harris Interactive (12/07)
Saw Rating Information
Based on these ratings,
considered a change
Based on these ratings,
actually made a change
Hospitals
Health
Plans
Physicians
23%
26%
22%
2%
4%
5%
1%
1%
2%
Transparency – Quality Improvement
Rates for Hip Revisions
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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
Countries with National Joint Replacement
Registries
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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
Why doesn’t the U.S. have
mandatory device registries?
Cost and Quality
Healthcare as Percentage of GDP
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60%+ of NME passes through public sector
budgets (CMS, public employees, tax
breaks, etc.)
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Healthcare at 16.3% of GDP (2007)
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Therefore, about 10% of GDP is healthcare
spend passing through public sector
budgets (.6 x 16.3% = 9.8%)
Cost and Quality
Healthcare as Percentage of GDP
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Total tax revenues in U.S. (federal, state,
local) equals about 28% of GDP
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So, healthcare uses about 1/3 of public
sector budgets (.098/28% = 35%) and
growing!
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Healthcare at 20% of GDP = 43% of public
sector budgets
Cost and Quality
Example: Michigan “Checklist”:
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Over 18 months, reduced infections in ICU
by 66%
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Estimated 1,500 lives saved
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Estimated $100 million saved
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
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