“What’s Driving P4P and Where Are We”

R. H. Walker MDOctober 25, 2006

National Pay for Performance (P4P) Programs

• Momentum started with IOM reports

• Employer market is looking for better quality ROI for health care dollars – Bridges to Excellence

• Medicare Initiatives in P4P

• President Bush’s goals for EMRs

Medical Errors – Institute Of Medicine Report

• 44,000 – 98,000 Americans die from medical errors annually

• Only 55% of patients received recommended care• Medication-related errors of hospitalized patients

cost roughly $3.5 billion annually• Medical errors kill more people per year than

breast cancer, AIDS, or motor vehicle accidents

To Err is Human, Crossing the Quality Chasm, Preventing Medication Errors: The IOM Health Care Quality, 1999, 2001, 2006

Condition % Recommended Care Received

Low back pain 68.5

Coronary artery disease 68.0

Hypertension 64.7

Depression 57.7

Orthopedic conditions 57.2

Colorectal cancer 53.9

Asthma 53.5

Benign prostatic hyperplasia 53.0

Hyperlipidemia 48.6

Diabetes mellitus 45.4

Headaches 45.2

Urinary tract infection 40.7

Hip fracture 22.8

Alcohol dependence 10.5

Elizabeth McGlynn, et al, “The Quality of Health Care Delivered to Adults in the United States,” NEJM, Vol. 348:2635-2645 June 26, 2003 (No. 26).

RAND Study Confirms Quality Gap

1

10

100

1,000

10,000

100,000

1,000,000

Defectsper

million

s level (% defects)

U.S. IndustryBest-in-Class

Anesthesia-relatedfatality rate

Airline baggage handling

Outpatient ABX for colds

Post-MIb-blockers

Breast cancerscreening (65-69)

Detection &treatment ofdepression

Adverse drugevents

Hospital acquired infections

Hospitalized patientsinjured through negligence

1(69%)

2(31%)

3(7%)

4(.6%)

5(.002%)

6(.00003%)

Source: modified from C. Buck, GE

Overall Health Care in U.S. (RAND)

Health Care Quality Defect Rates Occur at Alarming Rates

2005 National P4P Study

0

10

20

30

40

50

60

70

80

90

Nu

mb

er o

f P

rog

ram

s

CommercialHealth Plans

Medicaid Medicare EmployerGroups

Other

2005 National Pay for Performance Study, Med-Vantage

25% increase from 2004

Key Findings from the National P4P Study

• Expansion to PPO and CDH Products

• Expansion to specialists – 52%

• Increasing use of tier fee schedules rather than bonus payments

• Demonstration of ROI

• Growing interest in public reporting

• CMS in the P4P market

2005 National Pay for Performance Study, Med-Vantage

Transparency

– Provide health care consumers information to make the right decision

"If you don't want people to see your data, you're in the wrong century,"

Dennis O'Leary, Chief Executive Officer JCAHO, Aug 2006

Why Transparency ?

• Market Demand – Employers

• Consumerism

• Impact on quality outcomes and affordability

President Bush Calls On Hospitals To Share Price And Quality Data, AHA Issues “Roadmap” To Price Transparency

“Every hospital represented here should take action to make information on prices and quality available to all your patients.If everyone here cooperates in this endeavor we can increase transparency without the need for legislation from the United States Congress,” said Bush

American Health Lawyers Association website – May 2006

May 1, 2006 address to the annual meeting for the American Hospital Association

Three Components of Transparency

Cost Quality Decision Support

Helping consumers make informed health care choices as consumers are asked to pay a greater portion of the cost of care

Cost of Care

• Hospital Claims• Inpatient• Outpatient

• Physician Claims• Other services

• Pharmacy• DME

• Relative Scales vs Absolute Dollars

• Costs by Treatment Episodes vs single CPT codes

• Differences in benefit designs

• Global rates

Issues Cost Sources

Quality of Care

• National Measures such as HEDIS

• Satisfaction surveys• Needs to be both by

hospital and physician• Focus on quality not

cost efficiency

• Issue of small numbers

• Need for national benchmarks

• All payer data bases • Risk adjusted data

IssuesMetrics

Decision Support

• Information needs to be relevant for a member’s plan and benefit design

• Absolute necessity with consumerism

• Needs to include a comparison tool

• Needs to be linked to both quality and cost

Virginia Pay for Performance Programs

• Quality-In-Sights Hospital Incentive Program – (Q-HIPSM)

• Quality Physician Performance Programs - (Q-P3SM)

• Cardiology• Gastroenterology• Cardiac Surgery

• Performance Extra - PEX

Strategy to match reimbursement to evidence based medicine and quality of care outcomes

Q-HIPSM - Successful in Aligning with National Performance Based Incentive Principles

• AMA, JCAHO, CMS, AHA, MGMA all have P4P principles

• Q-HIP • Is voluntary• Consistently applies nationally vetted and recognized

evidence based indicators• Aligns reimbursement with the practice of high quality

and safe health care for all consumers• Is transparent with PSO validation and auditing of data• Available to all network hospitals

Quality-In-Sights Hospital Incentive Plan

“By working together we can improve the quality and reduce the variation in

care delivered across the entire program coverage area”

Q-HIPSM- A Collaborative Effort

Q-HIPSM- VHI-Developed Web Tool

Q-HIPSM in Virginia

• 60 hospitals to participate in Q-HIPSM by 2006 • 11 large health systems• 92.7% of Anthem inpatient admissions in Commonwealth

of Virginia• Rural, local and tertiary care hospitals• All regions of the Commonwealth represented• Outside Virginia

• Northeast Region (ME, NH, CT): 24 hospitals• Georgia: 20 hospitals• New York: 40 hospitals (planned)• Western Region: (CO, NV): 19 hospitals

Scorecard Components

Patient Safety Section (25% of total Q-HIP Score)

•JCAHO Hospital National Patient Safety Goals

•Computerized Physician Order Entry (CPOE) System

•ICU Physician Staffing (IPS) Standards

•NQF Recommended Safe Practices

•Rapid Response Teams

•Patient Safety and Quality Improvement Measures

Member Satisfaction Section(15% of Total Q-HIP Score)

•Patient Satisfaction Survey

•Hospital-Based Physician Contracting

Patient Health Outcomes Section (60% of total Q-HIP Score)

ACC-NCDR Section•7 ACC-NCDR Indicators for Cardiac Catheterization and PCI

JCAHO National Hospital Quality Measures•Acute Myocardial Infarction (AMI) Indicators•Heart Failure (HF) Indicators•Pneumonia (PN) Indicators•Surgical Care Improvement Project (SCIP)•Pregnancy Related

CABG Indicators•5 STS Coronary Artery Bypass Graft (CABG) Measures

Upfront Costs by Hospitals to Implement Q-HIPSM

• ACC-NCDR: $2,995• STS Database: $2,850• Additional FTE*: NA

Outcomes (All-Payer): Serious complications – Cardiac catheterization

2.70%

2.10%

3.00%

2.10%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

2003 2004National

2003 2004Q-HIP

22% decrease 29% decrease

Confidential for internal use only

Outcomes (All-Payer): Serious complications – PCI (angioplasty)

4.50%

3.60%

5.40%

2.90%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2003 2004National

2003 2004Q-HIP

20% decrease 47% decrease

Confidential for internal use only

Outcomes (All-Payer): Door-to-balloon time of 90 minutes or less

41.0%46.0%

49.7%

58.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2003 2004National

2003 2004Q-HIP

12% increase

17% increase

Confidential for internal use only

Surprising Developments

• One large hospital reports Q-HIP scores to its board of directors annually.

• A number of hospitals include Q-HIP scores as part of their own internal corporate performance reporting

• A major academic medical center ties Q-HIP scores to front-line staff salary bonuses

Because (Q-HIP) uses aggregated hospital-wide performance data, it overcomes problems with small numbers and difficulties with attributions. Because the rewards are based on shared performance, the program is intended to create incentives for competing physician groups to work together with hospital administration in a cooperative manner to achieve continuous quality improvement.Congressional Testimony of John Brush, MD, American College of Cardiology July 27, 2006

This is a win-win situation in my mind. As health care providers, we always strive to do the right thing for our patients. The reality is this sometimes costs more in terms of putting in place new structures and processes to support a better way of delivering services.

Ron Clark, MD, Chief Medical Officer, VCU Health System

Quality Physician Performance Quality Physician Performance Program – Q-P3Program – Q-P3SMSM

Q-P3SMSM - Cardiology

• Voluntary Program

• Based on an all payers data base except for the pharmacy measure

• Mirrors QHIP indicators to align incentives

• Final Scorecard results are based on hospital market share

• Rewards are based on excellence

Physician Group SAMPLE CARDIOLOGY GROUP JULY 1, 2006 - JUNE 30, 2007Scorecard for Q-P3Market Share based on cardiac cath codes only for 07/01/2006 - 06/30/2007

IndicatorPoints

AwardedMax

PointsLow

BenchmarkMid

BenchmarkHigh

BenchmarkACC-NCDR Measures 3.00 4.00 6.00 Rate of serious complication-diagnostic caths 6.00 N/A N/A ≤2.5% Centra 0 0%Door to balloon time for primary PCI ≤ 90 min 6.00 70%-80% 80%-90% ≥90% Chippenham 0 0%Door to balloon time for primary PCI ≤ 120 min 6.00 N/A N/A ≥82% Carilion Medical Center 0 0%% of patients receiving clopidogrel 6.00 N/A N/A ≥90% Danville Regional 0 0%% of patients receiving statins @ discharge 6.00 N/A N/A ≥90% DePaul 0 0%Rate of serious complication-PCI 6.00 N/A N/A ≤3.75% Henrico Doctors 0 0%Risk-adjusted mortality rate 6.00 N/A N/A ≤1.5% Lewis Gale 0 0%JCAHO AMI Measures 2.00 3.00 4.00 Martha Jefferson 0 0%Aspirin at arrival 4.00 75%-90% 90%-95% ≥95% VCU Health System 0 0%Aspirin prescribed at discharge 4.00 75%-90% 90%-95% ≥95% Maryview 0 0%ACEI for LVSD 4.00 75%-90% 90%-95% ≥95% Memorial Regional 0 0%Beta blocker at arrival 4.00 75%-90% 90%-95% ≥95% Riverside Reg 0 0%Beta blocker prescribed at discharge 4.00 75%-90% 90%-95% ≥95% Sentara CarePlex 0 0%Smoking cessation advice 4.00 75%-95% N/A ≥95% Sentara Leigh 0 0%JCAHO Heart Failure Measures 1.00 2.00 3.00 Sentara Norfolk 0 0%LVF assessment 3.00 75%-90% 90%-95% ≥95% Sentara VA Beach 0 0%ACEI for LVSD 3.00 75%-90% 90%-95% ≥95% St. Mary's 0 0%Smoking cessation advice 3.00 75%-90% N/A ≥95% University of VA 0 0%Discharge instructions 3.00 75%-90% 90%-95% ≥95% Sentara Williamsburg 0 0%

Winchester 0 0%Generic Dispensing - Statins - BONUS 2.00 N/A N/A 48%

TOTAL 80.00

If total score is68.00 - 80.0056.00 - 67.99

< 56.00

Your Group's Reward is

0%

PAYMENT MATRIXthe additional fee schedule impact is

HighLow

QUALITY PHYSICIAN PERFORMANCE PROGRAM (Q-P3SM)Practitioner Report

YOUR GROUP'S MARKET DISTRIBUTION

Q-HIP Hospital

Your Group - Total

Patients at this hospital

% of your group total

patients seen at this hospital

Q-P3SM - Cardiac Surgery

• Voluntary Program

• Based on an all payers data base from the Society of Thoracic Surgery

• Developed in collaboration with Virginia cardiac surgeons - Virginia Cardiac Surgery Quality Initiative

IndicatorLow

Benchmark

Points for Low

Benchmark High

Benchmark

Points for High

Benchmark STS Clinical Indicators

CABG Operative Mortality Rate - Risk Adjusted ≤2.20 10 ≤1.32 20 Surgical Re-exploration - Risk Adjusted ≤3.3% 10 ≤2.3% 20 Prolonged Intubation - Risk Adjusted ≤8.3% 10 ≤6.4% 20 Pre-Operative Beta Blockade ≤75% 5 ≤85% 10 IMA Use ≤80% 5 ≤90% 10 Discharge Medication Compliance

Anti-platelet ≥93.1% N/A ≥93.1% N/A Beta Blocker ≥84.7% N/A ≥84.7% N/A Anti-Lipid ≥80.2% N/A ≥80.2% N/A Combined Result 2 of 3 5 3 of 3 15Point of Care Usage

Increased transactions ≥5% 2 ≥10% 5

Sample Scorecard for Cardiac Surgery

QP3SMSM - Gastroenterology

• Statewide offered to all participating physicians whose primary specialty is Gastroenterology

• Program applies to all products (Par/PPO & HMO) except Medicaid & Medicare which are excluded

• 4 Clinical Indicators & 1 Non-Clinical Indicator• Clinical Indicators are measured based on

Anthem claims data

Appropriate Use of PPI Therapy Prior to Endoscopy for the Management of GERDRepeat Colonoscopy for Patients with a Diagnosis of PolypsPPI Generic Dispensing Rate (GDR)Appropriate Testing for Helicobacter Pylori Infection Prior to Empirical TherapyAmbulatory Endoscopy Site Accreditation for Outpatient Safety and Effectiveness

Gastroenterology Indicators

Performance Extra - PEX

• Statewide from for HMO• Annual bonus• Indicators

• Asthma• Diabetes• Cholesterol • Hypertension• Mental Health• Generic Drug Utilization• Preventive Care• Quality of Service (Member satisfaction, open practice,

Point of Care, and EMR)

EMR Criteria

• Decision Support Tool• Formulary Management Tool• Chronic Disease Management Tool• Preventive Medicine Tool• Links to Diagnostic Providers (lab & x-ray)• Database Query Capability• Ambulatory Computerized Physician Order Entry

System

Timing Is Right for Pay for Performance

• Represents a Wellpoint strategy• Market place is looking for a solution• Impact on quality of care and affordability• Transparency movement is gaining momentum• Win-Win solution for providers, members and

employers