Why Value Based Purchasing for Small to Mid-Sized Employers? Andrew Webber, President and CEO...
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Transcript of Why Value Based Purchasing for Small to Mid-Sized Employers? Andrew Webber, President and CEO...
Why Value Based Purchasing for Small to Mid-Sized Employers?
Andrew Webber, President and CEONational Business Coalition on Health
Michigan Purchasers Health Alliance March 25, 2011
Presentation Overview
“Houston, We Have a Problem” “Imagine”Getting Started Final Thought
National Business Coalition on Health Identity: National, non-
profit membership association of 54 business and health coalitions. Network of 7,000 employers and 30 million covered lives
Vision: Better health, better care, lower cost, community by community
Mission: Helping member coalitions be leaders in their communities
The Driving Principles of the Coalition Movement: All health and health care is local! There are limitations to what a
single employer can do to drive meaningful, sustainable, change
Even a small number of employers working together can have a powerful and amplifying effect!
“Houston, We Have a Problem.”
James Lovell
Apollo 13
Poor Health:
Why does the United States
rank 37th in population
health status among
industrial countries?
US Obesity Epidemic
1985 2003
1995
No Data <10% 10%–14% 15%–19% 20%–24% ≥25%
Prevalence of Obesity Among U.S. Adults
Source: Behavioral Risk Factor Surveillance System, CDC
Uneven Health Care:
Safety - Tens of thousands die due to medical errors (IOM, 99)
Effectiveness - 50/50 chance of getting appropriate care (McGlynn, 03)
Costs of Poor Quality – 30% of direct expenditures due to overuse/misuse/waste (Juran & MBGH, 03)
Unexplained Medical Practice Variation - (Wennberg, 1973 - present)
Fragmented Care Delivery and Acute Care Focus Absence of HIT (Brailer, 05)
High Costs
Why does the United States spend twice as much per
citizen on health care than the next closest country?
Health Costs Far Exceed General Inflation
SOURCE: Mercer and InflationData.com
-1.1
%19
94
With Negative Consequences for Employers
On the Outcomes All Employers (of any size) Want Most:
Improved workforce health and productivity
Control over employer costs
Both Impact Competitiveness and the Bottom Line in a Global Economy!
But with Employers to Blame!For Stressful Worksites and Unhealthy Products
For a Toxic Payment System that Pays for: Volume rather than outcomes Individual units of care rather than episodes of illness Acute care not prevention Medical errors and “do overs” With no performance based payment
And for a Consumer Entitlement Mentality: That insulates individuals from cost sensitivity because of 3rd party
payment
And with Employers (of all sizes) to the Rescue? As influencer of all the key determinants of
health:- individual behavior - socio-economic- environmental- health care system
As purchaser of health care – After Government, largest health care purchaser - 1 trillion dollar spend,170 million covered lives
“Imagine”
John Lennon
Let’s Imagine
Where families, schools, worksites, communities create a culture and better conditions for health.
Where providers are free to compete, based on the published value of the services they provide, and rewarded for high performance.
Where patients, as consumers, are free to choose their providers, are sensitive to the value of the services they consume, and engaged in better managing their health.
Value Based Purchasing:Measure, Report and Reward
Four Pillars:
1. Performance Measurement
2. Transparency and Public Reporting
3. Payment Reform
4. Informed Consumer Choice/Engagement
Accelerating the Pace to the Ultimate Goal: Health and Health Care Improvement
VBP Strategies
PerformanceMeasurement
andReporting
Consumer Behavior Plan/Provider Behavior
Consumer Incentives
SelectiveContracting
Payment ReformValue Based
Benefits
Disease Management
HRAs
A Few VBP Pillar Sound Bites
Standardized Measurement: The foundation of VBP Need to measure both effectiveness
of medical services and performance of providers
Need to measure clinical quality, patient care experience, health status outcomes, and efficiency
Transparency & Public Reporting
Public reporting leads to improvement! Translation of performance and price
information for consumers a challenge Public reporting alone has not led to
significant market shift to high performance services and providers
Payment Reform
Transition away from fee-for-service Pay for performance New payment methodologies needed in
direction of global/bundled payments Greater balance between primary care vs.
specialty care
Informed Consumer Choice
The Goal: To influence the individual consumer to make informed choices at many levels:
to live a healthy lifestyle; to seek preventive services and care when sick; to share in, and make the best, treatment decisions; to comply with treatment regimen and self-manage,
particularly chronic disease; to select a high value plan, hospital, physician.
Informed Consumer Choice Area of greatest influence for employers; Establish a principle of self-responsibility
but with robust support; Strategies to include creative mix of:
supportive worksite culture, benefit designfinancial incentives in benefit designs, timely information, coaching and counseling
Getting Started (as a small-mid employer)
Small and Mid-sized Employers - Constraints and Advantages
Constraints Advantages- Limited HR resources - No corporate - Small risk pool bureaucracy- Fully insured - Leadership - Broker dependency engagement- Single plan option - Worksite culture
Relevance of HCR Legislation
Tax credits for small employers to help defray costs of employee HI coverage
Establishment of state health insurance exchanges
Participate in State Policy Development!
Getting Started
Top Five Recommendations: Diagnostics: profile workforce population health and
total cost burden C-Suite/Leadership Recruitment Health and Productivity Strategy Development,
targeted to employer’s workforce characteristics Value Based Health Plan Selection. Search for
innovation (e.g. embedding consumer incentives in plan design, high performance provider networks, health risk assessments)
Purchaser/employer coalition membership
http://www.nbch.org/vbpguide
eValue8 2010 Annual Report
Employer Health Asset Management
Tailoring Health Care Benefits to Your Employees
Final Thought
A Closing Thought
No single stakeholder is better positioned to influence and benefit from improved health and health care and the promise of cost control than the employer community.
Therefore, employers must lead if we are to realize meaningful and sustainable change!
But will they?