Pay For Performance: A Better Pay For Performance: A Better Environment for Quality in Environment for Quality in

Health CareHealth CareGeorge Isham, M.D., M.S.George Isham, M.D., M.S.

Chief Health OfficerChief Health OfficerHealthPartners, Minneapolis, MNHealthPartners, Minneapolis, MN

Health Information Technology Summit, D.C., September 9, 2005Health Information Technology Summit, D.C., September 9, 2005

The Healthcare System The Healthcare System The Quality ChasmThe Quality Chasm

Highly variable (and too often unsafe) quality of clinical care

Gaps between evidence and practice

New science takes 17 years to widely incorporate and practice

The Healthcare System The Healthcare System Some More ProblemsSome More Problems ……

The business model for pharmaceutical companies, device manufacturers, and healthcare services depends on inducing demand for their products and services

Unit pricing (FFS) induces over use of services

The Healthcare SystemThe Healthcare SystemSome More Problems …Some More Problems …

Asymmetry of information between patients and professionals

Patients do not understand the quality and cost of healthcare services (Quality for consumers is convenience, access and amenities)

Variability in health care performance is often unknown and providers are reluctant to display it

The Healthcare System:The Healthcare System:A Broken ThingA Broken Thing

Quality Chasm

Uninformed Consumers

Spiraling costs

HealthPartners’ ApproachHealthPartners’ ApproachMeasure value (Q/C), display it for consumers and reward providers for delivering it

Insist on transparent provider performance reporting for consumers, providers and purchasers

Realign cost and quality for consumers through plan design

HealthPartners’ ApproachHealthPartners’ Approach

Pay for Performance

Do not pay for catastrophic performance

Support quality improvement

A large open access network supports choiceSorts providers into two tiersIncludes access to comparative information about providersIncludes provider incentives for quality and cost efficiency

The Distinctions Plan Offers Consumer Incentives to Select High

Value Providers

The DistinctionsThe DistinctionsSMSM PlanPlanHow HealthPartners Tiers ProvidersHow HealthPartners Tiers Providers

Step 1. Quality & ServiceProviders are scored on quality and service measures.

Step 2. AffordabilityProviders are scored on risk-adjusted total cost of care. The score reflects the combined impact of price, efficiency and utilization management.

The DistinctionsThe DistinctionsSMSM PlanPlanHow HealthPartners Tiers ProvidersHow HealthPartners Tiers Providers

Step 3. Combined ScoresProviders need to meet both the risk-adjusted total cost of care test and the quality and service test to qualify for the best tier placement

Quality Quality –– Cost RelationshipCost Relationship

Metro Primary Care, Multi-Specialty and Single Specialty Clinics

0.40

0.60

0.80

1.00

1.20

1.40

1.60

0.8 0.85 0.9 0.95 1 1.05 1.1 1.15 1.2

Cost Index

Qua

lity

Inde

x

Tier 1-High Quality Low Cost

Quality Quality –– Cost RelationshipCost RelationshipMetro Hospitals

0.40

0.60

0.80

1.00

1.20

1.40

1.60

0.70 0.80 0.90 1.00 1.10 1.20 1.30

Cost Index

Qua

lity

Inde

x

Tier 1-High Quality Low Cost

Primary Care Report CardPrimary Care Report Card

Hospital Report CardHospital Report Card

HealthPartners Quality/Cost HealthPartners Quality/Cost Incentive ProgramsIncentive Programs

Two programs that drive quality improvement:

1. Outcomes Recognition Program2. Pay for Performance Program

Outcomes Recognition Outcomes Recognition Program (ORP)Program (ORP)

Introduced in 1997Offers bonus rewards to medical groups who achieve superior results26 medical groups in ORP care for 90 percent of our membersBonus pools $100,000 - $300,000

Pay for Performance ProgramPay for Performance Program

Introduced in 2002 Integrates payment for quality into primary care, specialty and hospital contracts Pay for Performance is part of the market rate – good value for employers and members

In 2004, HPI will pay up to $16 million in provider reimbursement for quality performance

HealthPartnersHealthPartnersOutcomes Recognition Program Outcomes Recognition Program

and Pay for Performance Programand Pay for Performance Program

2005 2005 Primary Care MeasuresPrimary Care Measures

60%55%Satisfaction with Appointment Scheduling65%60%Optimal Depression Care63%60%Generic Drug80%75%Assist95%90%Assessment

Tobacco:90%80%Body Mass Assessment30%25%Optimal Diabetes Care

60%55%Optimal Care for Heart DiseaseSuperiorExcellent

HealthPartnersHealthPartnersOptimal Diabetes Care: Optimal Diabetes Care:

Preventing ComplicationsPreventing Complications

0%

5%

10%

15%

20%

25%

30%

1999 2000 2001 2002 2003

MI, MI, stroke, eye & stroke, eye & kidney problemskidney problems26,000 mbrs with 26,000 mbrs with diabetesdiabetes4,8004,800 @ target for @ target for allallrisksrisks

’04 ORP Target 30%

Excellent Diabetes Care: Excellent Diabetes Care: Managing All Risk FactorsManaging All Risk Factors

OPTIMAL CAREBlood pressure under 130/85Daily aspirin use“Bad” cholesterol under 130HbA1c at or under 8.0Non smoker

0%10%20%30%40%50%60%70%80%90%

100%

BP ASAUse

LDL HbA1c TobacoFree

Met All

1999 2000 2001 2002 2003

Average A1c & CAD LDLAverage A1c & CAD LDL

66.5

77.5

88.5

9

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Mea

n A

1c

70

80

90

100

110

120

Mea

n LD

L

A1c CAD LDL-Chol

Fewer Diabetes ComplicationsFewer Diabetes Complications

0

2

4

6

8

10

12

14

16

18

20

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Amputations/1,000MI/1,000CABG+PTCA/1,000 New Retinopathy/1000

50

55

60

65

70

75

80

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Tobacco ‘Vital Sign’ ImpactTobacco ‘Vital Sign’ Impact

26%

16%

11%

23%

0%

20%

40%

60%

80%

100%

1997 1998 1999 2000 2001 2002 2003

Ask AssistTob Prev 2nd Hand Smoke

40% 40% have quit!have quit!60% 60% more asked!more asked!30% 30% more get help!more get help!50%50% less 2less 2ndnd Hand Hand smoke!smoke!

This means:This means:54,000 people quit 54,000 people quit Each year 250 don’t dieEach year 250 don’t die

MN Prevalence = 21%

HealthPartners Payment Policy HealthPartners Payment Policy Never EventsNever Events

Patients Should Never Have to Pay for Patients Should Never Have to Pay for a Never Eventa Never Event

As of January 1, 2005:Hospitals report Never Events to HPIHPI denies payment or recoups paymentApplies to hospitals only, not physicians Charges are provider liabilityMember cannot be billed!

BackgroundBackgroundNever EventsNever Events

In 1999 IOM documented the prevalence of medical errors in hospitals – “To Err is Human.”IOM recommended a mandatory reporting system to ID and improve persistent safety problems

BackgroundBackgroundNever EventsNever Events

In response in 2002 the National Quality Forum (NQF)

Defined 27 Never Events - things that should never, ever happen Established standards for reporting medical errors

Some NQF Never EventsSome NQF Never EventsSurgical Events

Wrong surgery, body part or patientRetention of foreign object

Product or DeviceContaminated drugs, devices, biologics

Patient ProtectionInfant discharged to wrong personPatient death associated with disappearance

Care ManagementPatient death or disability

Medication errorStage 3 or 4 pressure ulcers

Environmental EventsPatient death or disability

Wrong gas deliveredBurn while being cared for

Criminal EventsAbductionSexual Assault

Minnesota’s Adverse Health Minnesota’s Adverse Health Event Reporting LawEvent Reporting Law

Mandated the reporting and systematic tracking of NQF “Never Events”Sponsored by a coalition of hospitals, doctors, nurses, and patient advocatesBold leadership by Minnesota hospitalsPassed May, 2003 and effective July, 2004First in nation – unparalleled transparency

Adverse Health Events in Adverse Health Events in Minnesota HospitalsMinnesota Hospitals

First public report for period July 1, 2003 – October 6, 2004 *

Surgical 52 eventsProduct or device 4 eventsPatient protection 2 eventsCare Management 31 eventsEnvironmental 9 eventsCriminal 1 event

99 events

*Represents event reports completed during transition period of law

MN Community MeasurementMN Community Measurement ��

2004 Healthcare Quality Results2004 Healthcare Quality Results

© Minnesota Council of Health PlansAll rights reserved

Do not show, disseminate, or make copies of these materials without permission from the MN Council of Health Plans (Brust@mnhealthplans.org; 651-645-0099 ext. 12)

Blue Cross and Blue Shield of MinnesotaFirst Plan

HealthPartnersMedica

Metropolitan Health PlanPreferred One

UCare MinnesotaMinnesota Council of Health Plans

MN Medical GroupsNCQA

StratisHealth

2004 Medical Group Results 2004 Medical Group Results Average, High, Low Rates by MeasureAverage, High, Low Rates by Measure

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Asthma 5

-56

Depress

ion 18

0 Day

s

Ped Im

m Com

bo II

Adol Im

m Combo

II

Well Chil

d 6 Visit

s

Optimal

Diabete

s Care

Contro

lling H

BP

Breast

Cancer S

creen

Cervica

l Can

cer S

creen

Chlamyd

ia Test

16-25

A1c Test

A1c < 8.

0LD

L-Chol

Test

LDL-C

hol <13

0BP Test

BP <130/8

5

Aspirin

Dail

y 40+

Non-S

moker

Renal S

creen

Eye Scre

en

Medical Group Low Medical Group High Overall Average

© Minnesota Council of Health PlansAll rights reserved

Do not show, disseminate, or make copies of these materials without permission from the MN Council of Health Plans (Brust@mnhealthplans.org; 651-645-0099 ext. 12)

ICSI (Institute for Clinical ICSI (Institute for Clinical Systems Improvement)Systems Improvement)

A collaboration of 48 medical groups & A collaboration of 48 medical groups & hospital systemshospital systems

Sponsored by six health plansSponsored by six health plans

Established 1993Established 1993

Includes 54 hospitals and medical practices Includes 54 hospitals and medical practices totaling 7100 physicians (2/3rds in MN)totaling 7100 physicians (2/3rds in MN)

ICSI Member Locations

MissionMission

The mission of our collaboration is to The mission of our collaboration is to

champion the cause of health care quality champion the cause of health care quality

and to accelerate improvement in the and to accelerate improvement in the

value of the health care we deliver. value of the health care we deliver.

Crossing the Quality ChasmCrossing the Quality ChasmCommittee’s Conclusion:Committee’s Conclusion:

The American health care delivery system The American health care delivery system is in need of fundamental change. The is in need of fundamental change. The current care systems cannot do the job. current care systems cannot do the job. Trying harder will not work. Changing Trying harder will not work. Changing systems of care will. systems of care will.

To order: www.nap.edu

Care System

•Redesign of care processes based on best practice•Effective use of information technologies•Knowledge and skills management•Development of effective teams•Coordination of care •Incorporation of performance and outcome measurementsfor improvement and accountability

Supportivepayment and regulatoryenvironment

Organizationsthat facilitatethe work of patient-centered teams

High performingpatient-centeredteams

Outcomes:•Safe•Effective•Efficient•Pt Centered•Timely•Equitable

Adapted from IOM, Crossing the Quality Chasm

A supportive payment and regulatory environment

(In other words, a non-toxicpayment and regulatory

environment) is a critical requirement for

crossing the quality chasm.