Pay for Performance: Experiences Within An Integrated Delivery System

1. Pay for Performance: Experiences Within An Integrated Delivery System Jessica C. Dudley, M.D. Chief Medical Officer Brigham and Women’s Physicians Organization jdudley@partners.org March 4, 2009

2. Key points P4P Contracts have begun to engage physicians around addressing quality and efficiency…but there are limitations. The intense expansion of medical knowledge and technology are major contributors to rising costs, but provide us an incredible opportunity to diagnose and treat conditions previously unrecognized or untreatable. The electronic medical record is a critical tool in providing physicians with the best available information about an individual patient and is key to improving efficiency and effectiveness of care. Data and reporting are essential for measurement of performance; showing variation vs. one’s peers is an effective means to engage physicians. Care reimbursement models continue to evolve, and alternative payment models which support (and reward) quality and efficiency of care delivery will need to be developed. 2

3. Agenda Partners Healthcare System (PHS) and Brigham and Women’s Physicians Organization (BWPO) Pay for performance (P4P) Medical management and P4P at PHS and BWPO Efficiency: Pharmacy example Quality: Diabetes example Process: E-Prescribing example Future CMS PQRI and VBP Other 3

4. Partners HealthCare: An Integrated Delivery System Dana-Farber/ Partners Joint Venture Partners HealthCare System, Inc. Two Physicians Appointed by Partners Partners CommunityHealthCare, Inc. Newton- Wellesley Health Care System, Inc. Brigham And Women’s/ Faulkner Hospitals The Massachusetts General Hospital North Shore Medical Center, Inc. • Founded in 1994, shortly after the founding of Partners. • PCHI is the provider network for Partners. • Intentionally given entity status to assure MD voice and build trust Newton- Wellesley Hospital, Inc. The General Hospital Corporation The Brigham and Women’s Hospital, Inc. Faulkner Hospital, Inc. 4

5. Eastern Massachusetts PCHI Overview 100 miles 75 miles PHS Market Share Data: Adult IP Admissions: 22% (1) PCPs: 23% (2) 5 • Source: Massachusetts Division of Healthcare Finance and Policy; Ages 0-17 excluded. • Sources: Folios, Partners Corporate Provider Master, PCHI

6. Network Composition Partners Community Healthcare, Inc ~6,337 Total MDs Primary Care: ~1,162 Specialist: ~ 5,175 Academic: ~ 419 Community: ~743 Community: ~1,879 Academic: ~3,296 Total: 2,622 More tightly aligned PHS Community Hospital PHOs: 1,013 Integrated Practices: 233 Affiliated Groups & PHOs:: 1,376 Less tightly aligned 6

7. Components of a Clinically Integrated Network 1. Common practice standards and protocols to govern treatment. Uniform across the network and across contracts Developed and/or implemented via collaboration among MDs (PCPs and specialists). 2. Programs to monitor and control utilization and ensure quality. Rank and file MDs are aware of programs/goals and can articulate organization’s approach to quality/efficiency. 3. Measurable outcomes that demonstrate efficiencies. Regular evaluation and reporting back to MDs/hospitals Incentives/remedies to modify practice patterns and ensure compliance. Meaningful financial incentives/penalties (payer or internal) Significant investment in infrastructure Support development/management of clinical programs Common electronic medical record 7

8. Components of a Clinically Integrated Network Common Practice Standards and Protocols The elements that define a clinically integrated network are the same elements that will improve performance and patient care quality Programs to monitor & control utilization and ensure quality Common electronic medical record Clinically Integrated Network Measurable outcomes that demonstrate efficiencies Significant investment in infrastructure Incentives & remedies to modify practice patterns & ensure compliance. 8

9. Agenda • Partners Healthcare System (PHS) and Brigham and Women’s Physicians Organization (BWPO) • Pay for performance (P4P) • Medical management and P4P at PHS and BWPO • Efficiency: Pharmacy example • Quality: Diabetes example • Process: E-Prescribing example • Future • CMS PQRI and VBP • Other

10. Evolving Reimbursement and Care Models Full Capitation Closed System Sub-Capitation Team-Based Care Case Rates Disease Management Evolution of Supporting Systems PAYMENT METHODOLODY P4P (Robust) EMR P4P (“Lite”) Registries Fee-for-Service Non-MD Clinicians Solo MD Practices Group Practices Multi-Specialty Group Practices Integrated Delivery System Clinic Model STAGE OF EVOLUTION Slide used with permission of Thomas H. Lee, MD, of Partners HealthCare System

11. Incentives Targets Measurement Components Of P4P Programs Component Choices • Payment or withhold needs to be large enough to provide incentive to physicians • Withhold pool can be significant at practice or system level but at the provider level the amount of money can be very small • Timing of withhold settlement impacts the link between the performance and return • Efficiency targets – goal of lowering costs • Prescribing generic medication • Ordering radiology exams that impact clinical decisions • Quality goals – goal of improving health outcomes • Targeted diseases (e.g. diabetes, cardiovascular disease) • Process goals – goal of changing status quo behaviors or instituting new processes to improve quality of care • Electronic prescribing • Testing targets (e.g. number of eligible patients w/ mammogram) • Data source: claims vs. clinical record vs. patient reports • Adjustments: severity, socioeconomic status • Group vs. individual physicians

12. Major Target Areas in Partners P4P Contracting (Phase 1) Hospitals Hospital use (and type) Radiology Computer order entry JCAHO cardiac quality measures Physicians Hospital use Pharmacy Radiology Electronic record adoption Diabetes/Asthma/ Chlamydia screening 12 Slide used with permission of Thomas H. Lee, MD, of Partners HealthCare System

13. Community PCP EMR AdoptionCommunity PCP EMR Adoption TrendE Data as of December 31, 2007. 13 Slide used with permission of Thomas H. Lee, MD, of Partners HealthCare System

14. New Major Target Areas in Partners P4P Contracting (Phase 2) Hospitals Hospital use (and type) Radiology Safe medication administration systems (e.g., eMAR, smart pumps) JCAHO cardiac quality measures NSQIP/IHI Patient experience of care (HCAHPS) End of life care Physicians Hospital use Pharmacy Radiology Electronic record effective use (electronic prescribing, problem list accuracy) Diabetes outcomes (LDL, BP, HbA1c) Patient experience of care End of life care Shared decision making High risk patient identification and referrals The contract goals are becoming more meaningful – and that is only possible because of the progress with EMR and other systems achieved thus far. 14 Slide used with permission of Thomas H. Lee, MD, of Partners HealthCare System

15. 2009 Summary Of BWPO Physician P4P Programs Overview P4P Goal BWPO Medical Management Program • Prescribe generics and lower cost brand drugs where appropriate • Order appropriate imaging tests when necessary for diagnosis management • Encourage appropriate “site of care” for individual patients Efficiency: • Pharmacy • Radiology • Inpatient • Programs that identify and support physicians in management of patients with targeted diseases • Case Management for patients at risk for readmission • Pharmacy management for targeted patients Quality: • DM • HTN • CVD Process: • E-Prescribing Training • Advanced directive education • Distribution of patient education materials • E-RX • End of Life • Shared Decision 15

16. Annual cost differential: prescribing a generic drug can provide a patient (and the system) over a four fold cost savings to the patient and a ten fold overall cost savings Efficiency: Pharmacy Example 16

17. Problem: What happens when we don’t get it right the first time? Efficiency: Pharmacy Example Cost Barrier $45 co-pay Mrs. Jones is a 50 y.o. female. Newly diagnosed with depression. No Fill Rx - Lexapro Access Barrier Prior Auth Required Prescribed by Psychiatrist Rx – citalopram $10 copay Back to PCP Fill Goal: To influence MDs behavior so they “write right” the first time. 17

18. Efficiency: Pharmacy Example BWPO PRIMARY CARE PRESCRIBING POLICY Pharmacy: BWPO Primary Care Prescribing Policy “It is the policy of Brigham and Women’s Primary Care to first prescribe a generic or over the counter (OTC) drug if available. When there are no Generic or OTC drugs available, or if there is a documented generic/OTC failure, physicians will work with patients to find an appropriate alternative.” 18

19. Efficiency: Pharmacy Example Physician Education Approach: Adult Therapeutic Grid • Physician Education • Target a sub-set of most frequently prescribed drug classes. • Clinical review of each class to support Therapeutic Effectiveness (PCHI Outpatient Drug Management Committee). • Identify lower cost brand and generic alternatives. • Develop and disseminate PCHI Therapeutic Grid with supporting Prescriber and Patient Education. 19

20. Efficiency: Pharmacy Example Support providers at time of prescribing, guiding them to most efficient and cost effective Rx for specific patient based on their insurance or lack thereof. Point of Care: Optimal Approach achieved through use of EMR LMR identifies Nexium as “red” PCP enters Rx - Nexium No Rx 40 y.o. female with dyspepsia Select from Alternatives Rx – omeprazole Fill 20

21. Efficiency: Pharmacy Example Point of Care Supports Efficient Prescribing and Promotes Quality Care Through Real Time Decision Support

22. Efficiency: Pharmacy Example Point of Care Supports Efficient Prescribing and Promotes Quality Care Through Real Time Decision Support

23. % Generic - By PCP (Example Of A Report For One BWPO Practice) Efficiency: Pharmacy Example • Average BWPO % Generic is 81.76% v. Practice average of 78.41% • Patients who pay generic vs brand co-pays save an avg. of $420/year • Studies show that high drug costs adversely impact medication adherence • Pharmacy claims data Jan 08 – Jun 08 23

24. BWPO Pharmacy: Use Of Generic Drugs Has Steadily Risen Efficiency: Pharmacy Example BWPO pharmacy trends, q106-q408 % generic prescriptions written 24

25. Quality: Diabetes Example Opportunities For Improvement In Getting Patients To Target % of BWPO P4P Patients with diabetes at target for LDL, A1C*, BP, and all three Source: Matrix (CDR+Claims) as of 12/5/08 Missing Data counted as “not at target” 25

26. Quality: Diabetes Example Quality: Variation In LDL Target Achieved By Practices Percent of patients with CVE or diabetes at LDL target Source: Matrix (CDR+Claims) as of 12/5/08 LDL Compliant: LDL Drawn in 2008 with value less than 100 26

27. BWPO PCP “Action” Reports: Inform Physicians about Patients and Offers Provider Support for Follow-Up Quality: Diabetes Example 27

28. There is no “one size fits all” solution…but using electronic communication with linkage to EMR improves efficiencies. Quality: Diabetes Example Results from the PCP “Action” Reports • PCPs Returned the Reports • Reports alone are not an effective tool for enrollment of patients in programs external to PCP office • Only 5% of eligible patients were signed up for LDL titration program via report • Further education on protocol followed by direct email outreach with communication of eligible patients along with LDL titration protocol to PCPs resulted in much higher interest in enrollment. • Preliminary results reveal approx 60% enrollment rate Next Steps • List Management Software • Electronic communication • Links from the reports directly into the patients medical record • Use electronic survey communication to capture physician follow-up orders 28

29. E-prescribing Adoption Process: E-Prescribing • E-Prescribing improves physician efficiency and patient quality • With ‘favorites” it typically only takes a few clicks to prescribe and renew prescriptions • Prescriptions are accurate and clear, no more deciphering physician handwriting • System can provide real time decision support: system can warn of drug/drug interactions, allergies listed in patient record, lower cost alternatives • BWPO developed a program that customized the medication module for each practice and trained physicians on how to efficiently use the system • Key elements • Leadership buy in • Engage “super-user” • Customize medication module – set up favorites and short cuts • Customize training – presentations, one-on-one 29

30. E-prescribing: preset “favorites” help physicians quickly prescribe meds they use most often Process: E-Prescribing 30

31. Process: E-Prescribing E-prescribing: Real Time Decision Support 31

32. BWPO E-prescribing Performance improving Process: E-Prescribing Percent of physicians using e-prescribing 2009 Target: 75% 32

33. Process vs. Outcomes Too much vs. too little Lack of “fairness” Confusion Some shortcomings of P4P Problem Description • Focus on achieving process metrics, not always on outcomes • E.g., testing targets focus on getting the test done, not the results • Work to the target and not beyond • If threshold set too high, some MDs may not see hope of payment • Majority of targets linked to PCP engagement; very few current goals tied to specialist engagement • Providers at risk for things they can’t control • Poor patient adherence • Varying severity of illness • Different payors have their own programs, with their own targets • Not all patients included, but physician practice doesn’t change by payer • Often difficult to measure with existing data resources

34. Agenda Partners Healthcare System (PHS) and Brigham and Women’s Physicians Organization (BWPO) Pay for performance (P4P) Medical management and P4P at PHS and BWPO Efficiency: Pharmacy example Quality: Diabetes example Process: E-Prescribing example Future CMS PQRI and VBP Other 34

35. CMS: PQRI and Value Based Purchasing • CMS Physician Quality Reporting Initiative • Current model is “bonus” for “reporting” on selected quality metrics and demonstration of E prescribing • Physician participants to date have experienced many challenges and few have received anticipated payments • Anticipate will become “required” for payment, not “bonus” going forward • CMS Issue Paper December 2008 with plans to transition from FFS to “Value-Based Purchasing” • Acknowledging that fee for service NOT effective for ensuring quality and efficiency • Goal of providing right care for every person every time • Promote practice of evidence based medicine (msmt, financial incentives, public reporting) • Decrease fragmentation and duplication of care (episodes of care, smoother transitions) • Effective management of chronic diseases (focus on prevention, preventable admissions, advanced care planning, end of life care) • Accelerate adoption of HIT • Empower consumers to make value based health care choices

36. Some Conclusions from P4P • Take risk on things you can control • Engage physicians in the process • Leverage EMR technology – • Creates efficiencies in engaging physicians at point of care • Provides more comprehensive information about individual patients • Deploys clinical decision support • Captures information for measurement and reporting • Aim for concordance of measures across health plans • Be proactive in designing systems • Approach may vary by measure • Understand your organization’s strengths and weaknesses • Measuring the impact of a program can be a challenge • Process vs. outcome • Quality vs. efficiency • Modify programs as you learn more

37. A recap • P4P Contracts have begun to engage some physicians around addressing quality and efficiency…but financial risk is minimal and affects primarily primary care physicians and not specialists. • The intense expansion of medical knowledge and technology and the accompanying rising costs demand changes in the traditional models of individual providers caring for individual patients under a FFS system and support more team based care with alternative payment models which support quality and efficiency of care delivery. • The electronic medical record is a critical tool in providing physicians with the best available information about an individual patient and is key to improving efficiency and effectiveness of care. Physicians need to adopt the use of EMRs and will need to be trained in effective use. • Data and reporting are essential for measurement of performance; showing variation vs. one’s peers is an effective means to engage physicians. • Patients will need to become more engaged in their health care management and decision making with increased transparency.