Tiered Networks

• Practicing Physicians Still Skeptical

• Amount of Dollars Still Small . . . And IOM Recommends A Slow Phase-In

• Programs Do Not Integrate Costs and Patient Centeredness

• New Political Leadership Could Slow Momentum . . . And The Right Is Skeptical As Well

But…P4P Momentum Is Challenged

“. . . the idea of paying doctors for providing

quality care is offensive . . .”

Rep. Pete Stark (D-CA)

“P4P. . . empowers government bureaucrats

to make medical decisions instead of

physicians and patients . . .”Heritage Foundation

Source: Robert S. Galvin, MD, 2nd National P4P Summit, February 14, 2007

And…P4P Momentum SHOULD Be Challenged

MEASURES . . . . . Process, Outcomes and the Pipeline Crisis

EVIDENCE . . . . . . Self-Fulfilling Prophecies and Death By Academia

FRAMEWORK . . . P4P versus Overall Payment Reform

Adapted from: Robert S. Galvin, MD, 2nd National P4P Summit, February 14, 2007

Death By Academia?

Pay for Performance at the Tipping Point

Arnold M. Epstein, M.D.

Volume 356:515-517 February 1, 2007 Number 5

“. . .The CMS may have much to gain from recognizing that pay for performance is fundamentally a social experiment likely to have only modest incremental value.”

Based on a handful of studies with small incentives, including the Premier Demonstration:

BUT we aren’t comparing to a “placebo” – what about the failed “experiment” of current system of payments?

Adapted from: Robert S. Galvin, MD, 2nd National P4P Summit, February 14, 2007

Is P4P The Same As Payment Reform?

Current Payment System is Fatally Flawed• Fee-for-Service• Weighted Towards Interventions• Discourages Prevention/Coordination

But P4P Programs Put Rewards On Top Of This Structure

• “You Can Put Lipstick On A Pig, But It’s Still A Pig”

Source: Robert S. Galvin, MD, 2nd National P4P Summit, February 14, 2007

Moving beyond make-up…changing the health care diet…

Fixing current payment dysfunction with “pay for performance” as an add-on to existing is like….

Fixing the American obesity epidemic by the “add-on” of broccoli to the Big Mac

WE NEED: a new diet and portion control

Beyond Broccoli on the Big Mac

• Pay for Results

• Pay more efficient delivery (e.g., e-visits or telephone services)

• Pay for care coordination

• Pay for episodes – cutting across inpatient and outpatient

• Differential payment based on use of care improving processes (HIT)

• Non-payment for errors

• Non-payment for unproven technologies

Physician Practice Perspective

• Each is a small business owner

• 2000 – 3500 people/physician at any point in time (ever- changing)

• Those people are represented by, on average, 75-100 payors each with their own rules/expectations . . and even more employer groups are represented

MGO Contracting Model

Outline

• Historic Development

• Antitrust Background

• Messenger Model

• The Need to Change

• Plans for Change

Historic Development

Initial Model

• MGO utilized a single signature contracting model

• In this model MGO had the ability to negotiate fair rates of physician reimbursement

• Why did we change?

Historic Development

Time Sequence & the Legal Climate

• 1995 – MGO bought 50% ownership in OhioHealth Group, a PHO that owned an HMO license. Because of the financial risk the HMO ownership represented to MGO, MGO met the financial integration requirements to negotiate payment rates for physicians.

• 1996 – Antitrust scrutiny of physician organizations was less strict. “FTC Relaxes Standards for Physicians Networks”

Wall St. Journal August 29, 1996

Historic Development

Time Sequence & the Legal Climate

• 2000 – FTC intensifies its investigation and regulation of physician networks

• 2001 – OhioHealth Group gets out of the HMO business

MGO ceased to meet the financial integration test. MGO could no longer negotiate rates for physicians.

Antitrust Background

General Applications of Antitrust laws to

Physician-Payor Contracting•Each physician practice is considered a competitor with every other physician practice.

•Competitors are restricted from colluding and restraining competition (as prior slide).

•Cartel – an unintegrated group of competitors who:– Agree on price or other competitive terms of dealing

– Engage in a concerted refusal to deal

Antitrust Background

Permissible Physician Conduct

1. A Tax ID can set its fees and terms of contracting2. Form an integrated group of practitioners

There are two standards for integrationFinancial IntegrationClinical Integration

3. Adopt a messenger model arrangement

Messenger Model

Functional Definition

An intermediary organization (e.g. MGO) delivers the payers terms and rates (message) to the network physicians and then delivers the individual responses (message) of the physicians back to the payer.

Messenger Model

Guidelines

• Negotiation is not allowed!• Discussion and Agreement among physicians is not

allowed.• The messaging organization (e.g.MGO) is restricted

in what it can tell physicians about the offer, i.e. MGO can provide written objective analysis of the proposal, but cannot provide any opinion about the acceptability of the proposal.

The Need to Change

“Strengths” of the Current Messenger Model

• Level of performance established during the single signature era.

• Structural advantages

The Need to Change

WEAKNESSES of the current Messenger Model

• MGO cannot negotiate physician rates

• The current model is Not a sustainable model for long-term physician success

Plans for Change

Goals

• Create the structure and processes that allows MGO to negotiate for physicians

• Become Financially Integrated

And

Clinically Integrated

Plans for Change

Definitions• Financially Integrated Networks

– Risk contracts

– Performance Based model

• Clinically Integrated Networks– Measurable quality of the whole is greater than the sum of

its parts as a result of EITHER additional new programs and/or additional coordination of existing programs

Objective

Develop an integrated approachfor taking MGO and OhioHealth

(as OhioHealth Group PHO)

to the market of payers and/or employers.

The initial focus will be on an Employernamed OhioHealth

Process Targets (Part 1)

• Identify Process measures that align with OhioHealth’s priorities of promoting employee wellness and controlling costs

• Engage MGO physicians in development of the measures

• Support the measures by the data warehouse and other data inputs

• Recognize that not all MGO physicians will be impacted by the pilot program or in any given year of an ongoing program

• Provide financial rewards for those whose performance earns it

• Implement Educational Interventions – physicians and employee/employer

Baseline Measures Forming the Standards of Eligibility for Rewards for

MGO Physicians Caring for OhioHealth Insured Patients

Note: To quality for rewards, the percentage of your list of eligible patients (next page) needs to exceed these standards. Each baseline measure is the actual result for this population in the last 1-3 years (the actual number of years depends on the specific measure)

The proportion of women age 18-64 having received a Pap test during 2004-2006.

XX%

Cervical Cancer Colo-rectal Cancer

The proportion of patients age 50-64 receiving either a fecal occult blood test, barium enema, flexible sigmoidoscopy or colonoscopy in 2006

XX%

The proportion of patients having received at least one coded preventive health service visit in 2006. (99381 thru 99396)

XX%

Preventive Health Visits

The proportion of pediatric patients diagnosed as having pharyngitis and prescribed antibiotic who also received a strep screen

XX%

Pharyngitis

The proportion of adult diabetics having received all 3 of the following last year: 1) HBA1c test at least 2/year; 2) annual LDL level and 3) annual urine microalbumin or prescribed an ACE/ARB

XX%

Diabetes

•The emphasis of the program is that the patients get the services – not which doctor should get credit (or not) for the service being provided.•When a patient receives the desired services the physician (s) deemed having principally cared for that patient (including OB GYN)) will get “credit”.

The proportion of women age 40-64 having received a mammogram in 2005 or 2006.

XX%

Breast Cancer

*U.S. Preventive Services Task Force Recommendation 2002

*U.S. Preventive Services Task Force Recommendation 2003

*U.S. Preventive Services Task Force Recommendation (modified) 2002

*National Committee for Quality Assurance HEDIS 2006

*Standards of Medical Care in Diabetes – 2007 – Diabetes Care January 2007

Your Measure for 2007The proportion of your patients having received a mammogram in 2006 or 2007.

Your Measure for 2007The proportion of your patients having received a Pap Testin 2005- 2007.

Your Measure for 2007The proportion of your patients having received either a fecal occult blood test, barium enema, flexible sigmoidoscopy or colonoscopy in 2007

Your Measure for 2007The proportion of your patients having received at least onecoded preventive health servicevisit in 2007.

Your Measure for 2007At the end of the year, your proportion of patients in 2007 will be greater than the percentage in 2006.

Your Measure for 2007The proportion of your Patients having received all 3 of the following thisyear: 1) HBA1c test at least 2/year; 2) annual LDL level and 3) annual urine microalbumin or prescribed an ACE/ARB

Economic Targets (Part 2)

Establish Baseline Total Cost - example “MGO Insured” v. “non-MGO Insured” cost PMPM

Establish Expected/Targeted Cost - historical trends, disease demographics /associated programs of care, etc.

Measure Performance v. Target- The better the results of the baseline and initial performance comparisons, the

quicker we are ready to take our story to the market

IF Performance is better than Target, a portion of the “savings” are rewarded to MGO Physicians

(Data from the Warehouse will support these measurements)

Overall Economic Targets

• We are identifying those members that are receiving the majority of their care from MGO physicians– The goal is to analyze the PMPM cost of those members

that are receiving most of their care from MGO physicians and compare it to the overall cost of the other members

– As we develop an accurate methodology for calculating cost we can use it to set targets for the MGO physicians

– Because of the nature of the calculation, and the approximations that by necessity go along with it, the PHO Strategy Group has been very careful to draw only the conclusions verifiable by the data

Economic Targets:Next Steps

• Finalize methodology

• When data is available, perform same calculation on all data for 2006

• Use 2006 data to set 2007 targets

  "Every system is perfectly designed to get the results it gets."  

     Paul Batalden, M.D.