National Behavioral Consortium Portland, Oregon June 2007

1. Rick Weisblatt, PhD Harvard Pilgrim Health Care National Behavioral ConsortiumPortland, OregonJune 2007

2. Harvard Pilgrim Overview

3. Harvard Pilgrim Health Care • Not-for-profit health plan licensed to do business in New Hampshire, Massachusetts and Maine • Over 1million members as of January, 2007 • Solid financial performance in a highly competitive marketplace • Expanded portfolio of self funded options with acquisition of Health Plans, Inc. • A year of national and local accolades – • “Best Place to Work” in 2005 from Boston Business Journal • Top Leadership Team 2005 in healthcare by HealthLeaders Magazine • US News and World Report / NCQA : #1 Health Plan in America 3rd year running • Behavioral health partner – United Behavioral Health

4. Harvard Pilgrim range of products Comprehensive Product Portfolio: • Harvard Pilgrim HMO • Harvard Pilgrim POS • Harvard Pilgrim PPO • Harvard Pilgrim HSA PPO Plans • HPHC Definity HRA Plans Including the more affordable… • Harvard Pilgrim Best Buy HMO • Harvard Pilgrim Tiered-Copay HMO • Harvard Pilgrim NetOption NH • HMO Harvard Pilgrim Best Buy POS Available on both Fully and Self-insured funding arrangements

5. Market Context

6. The marketplace is kind of a mess… • Utilization increases continue • Provider rate demands unabated • Technology advances at a dizzying clip • Not enough teeth in Evidence Based Medicine • Provider-level performance measures still primitive • Busy providers have little incentive to negotiate • Managed care “tools” eliminated or have run their course • Medicare and Medicaid continue to be “under-funded” • States look to health plans to fund budget shortfalls • Purchasers and consumers are cognitively dissonant

7. Medical Trends • Aging population • Patient demand • Chronic illness – prevalence, longer life expectancy • New technologies • Pharmacy industrial complex • Supply-driven market • Fragmented care system • Regulation

8. Health plan response • Target high ROI areas • Maximally leverage the member • Multi-pronged approach • Align everyone’s incentives • Drive evidence-based practice • Bring clinical IT into the 21st century • Public disclosure of meaningful data

9. Value Transformation High Impact on Americans • Quality  Costs Care System Response Clinical Re-engineering By MDs, hospitals Value of Health Benefits Consumerism & Pay for Performance Performance Disclosure  Market sensitivity to performance Performance comparisons For hospitals, MDs & Tx Source: Arnie Milstein Low 2002 2012 Key Evolutionary Steps

10. Behavioral Health in 2007

11. Just some of the issues… • Patient protection and appeals rights • Coverage mandates and expansion • Parity • Cost shifting from states • Carve in vs. Carve out

12. Managing Utilization: Wennberg & Fisher’s: Categories of Medical Care Effective care and medical error Preference-sensitive care Supply sensitive care

13. Supply-Sensitive Care – Capacity Determines use • Strongly correlated with resource supply • Examples include medical admissions, ICU stays, physician visits, specialty referrals, lab and radiology testing, especially in the last six months of life • Medical evidence weak or non-existent; patient preferences and values should play a significant role

14. Supply-Sensitive Care : Highest vs Lowest Spending Regions Physician Visits 0.5 1.00 1.5 2.0 25 3.0 0.5 1.00 1.5 2.0 25 3.0 Office Visits Inpatient Visits Initial Inpatient Specialist Consultations % of Patients seeing 10 or more MDs Psychotherapy Visits Imaging Tests Diagnostic Cardiology Procedures Chest X-ray Electrocardiogram CT / MRI Brain Echocardiogram Ventilation Perfusion Scan Ambulatory ECG (Holter) Lower in High Spending Regions Higher in High Spending Regions

15. HEDIS National Performance Trends

16. HEDIS National Performance Trends

17. HEDIS National Performance Trends

18. HEDIS National Performance Trends

19. HEDIS National Performance Trends

20. Harvard PilgrimPay for Performance and Recognition Programs

21. Impacting Provider Performance • Transparency and Disclosure • Public Reporting and Consensus Measures • Rewards and Recognition • Pay for Reporting • Pay for Performance

22. Evolution of Quality Incentive Programs

23. Overview of P4P • Encourage and reward investments and improvements in clinical outcomes and clinical infrastructure • Primary Messages: • Recognizing Excellence and Rewarding Improvement • Recognition of need to clearly support medical group administration (Medical Director and Administrative Stipend) • Use of efficiency measures such as lab Steerage and Tier 1 prescribing • Introduction of outcomes based performance, focusing on clinical values for Diabetes HbA1c and LDL measures • Performance measures structured to align with various practice types and within various contract models

24. Quality Advance Program • Introduced in 2004 • Complemented HPHC’s shift away from risk based contracts – provided “upside bonus ” for high quality care • Portfolio of elements developed through the evolution of P4P • Practices can earn up to $4.25 pmpm in 2006

25. Quality Advance Program 2006

26. Quality Grants Program • Unique to HPHC; valued by the physician and employer communities • Since 2000, 109 grants awarded for $8.6M • Proposals aligned with IOM quality goals, on a topic of strategic importance to HPHC • HPHC Medical Leadership and Harvard Pilgrim Physician Association Board review proposals • Funding based on practice membership and project scope ($25K-$125K)

27. 2006 Quality Grants Program • 19 grants awarded to MA, NH, ME practices (out of 32 proposals) • Topics: Health IT (10), Reducing Disparities in Healthcare (5), Depression (3), ADHD (1) • Total funding: $1.3 million • Grant synopses posted on HPHC Provider site

28. HPHC Honor Roll Physician Group Honor Roll- Adult & Pedi (since ‘03) • An Adult practice must show performance above the national 90th percentile in at least 9 of 11 HEDIS measures. • A Pediatric practice must show performance above the national 90th percentile in at least 4 of 5 HEDIS measures. • Recognition on HPHC member site: • Practice name listed • Icons in provider directory for PCPs in these practices Hospital Quality Disclosure • Designed to show excellence in CMS, JCAHO, and Leapfrog measures • HPHC has adopted the N.H. Foundation for Healthy Communities data set for reporting NH hospitals

29. And CMS is getting into the game From presentation by Regional CMS Administrator Dr. Charlotte Yeh on April 2, 2007

30. CMS as a Public Health Agency • Vision: To achieve a transformed & modernized health care system • Accurate & Predictable Payments • High Value Health Care • Confident Informed Consumers • Collaborative Partnerships From presentation by Regional CMS Administrator Dr. Charlotte Yeh on April 2, 2007

31. Physician QualityReporting Initiative (PQRI) • Eligible Professionals • Practitioners described in Social Security Act (SSA) Section 1842(b)(18)(C) • Physician Assistant • Nurse Practitioner • Clinical Nurse Specialist • Certified Registered Nurse Anesthetist • Certified Nurse-Midwife • Clinical Social Worker • Clinical Psychologist • Registered Dietitian • Nutrition Professional From presentation by Regional CMS Administrator Dr. Charlotte Yeh on April 2, 2007

32. Physician QualityReporting Initiative (PQRI) Quality Measures • 74 “2007 PVRP” quality measures posted on December 5, 2006 adopted in statute • Final list of 74 PQRI quality measures posted at www.cms.hhs.gov/PQRI, as a download on the Measures/Codes webpage • Antidepressant medication during acute phase for patients with new episode of major depression: Acute phase defined as 12 weeks. 18 years and older. • Participating eligible professionals who successfully report may earn a 1.5% bonus, subject to cap From presentation by Regional CMS Administrator Dr. Charlotte Yeh on April 2, 2007

33. CMS looking at efficiency as well • Efficiency Is One of the Institute of Medicine's Key Dimensions of Quality • Safety • Effectiveness • Patient-Centeredness • Timeliness • Efficiency: absence of waste, overuse, misuse, and errors • Equity • Institute of Medicine: Crossing the Quality Chasm: A New Health System for the 21st Century, March, 2001. From presentation by Regional CMS Administrator Dr. Charlotte Yeh on April 2, 2007

34. CMS’ Cost of Care Measure Development • CMS’ Cost of Care Measurement Goals • To develop meaningful, actionable, and fair cost of care measures of actual to expected physician resource use • Evaluate episode grouper software as measurement tool • To link cost of care measures to quality of care measures for a comprehensive assessment of physician performance From presentation by Regional CMS Administrator Dr. Charlotte Yeh on April 2, 2007

35. Bringing pay for performance to the behavioral health community

36. Considerations for Behavioral Health P4P • Set the stage for accountability • Promote consensus measures • HEDIS and CMS • Clinician reporting • Public reporting • Recognition programs • Incentives: financial and administrative

37. Issues • Self-reported specialties and credentialing • Lack of consensus outcomes measures • Groups practice vs. individual cottage industry • Privacy, patient protection and appeals • Parity

38. Some measure possibilities • Generic prescribing • Poly-psychopharmacology • Visits/member/year; risk and diagnosis adjusted • Outcomes tools • HEDIS Behavioral Health

39. Incentives • Honor Roll and Report Card • Self management • Steerage • Fee schedule inflator or flat dollars/unique member treated

40. Incentive programs for B.H. providers • UBH/PBH ALERT outcomes tool: steerage with pilot for financial incentive. • Anthem: Coordination of care, CD treatment planning, patient satisfaction, HEDIS. • Mass. Behavioral Health Partnership (Medicaid): Training in motivational interviewing for CD, inpatient LOS, use of outcomes tool (B.H. Labs). • State of Delaware: CD measures including treatment continuation. • Hawaii BCBS with major provider group: HEDIS measures, process measures.