AHRQ 2009 Annual Conference Research to Reform—Achieving Health System Change

1. AHRQ 2009 Annual ConferenceResearch to Reform—Achieving Health System Change Sam Ho, M.D. Executive Vice President Chief Medical Officer UnitedHealthcare September 16, 2009 Confidential property of UnitedHealth Group. Do not distribute or reproduce without the express permission of UnitedHealth Group.

2. Research Informing Health System Change • Benefit Plan Design • Coverage policies • Co-pays • Prevention • Medical • Rx • Behavioral Health • Program Design • Health and Disease Management • Quality and Cost Results • Reimbursement • Pay for Performance • Performance-based Contracting • Quality, Costs, and Consumer Experience • Capitation and Bundled Payment

3. Concerns Related to Research • PHI and IRB Review • Regulatory Review and Certificates of Coverage • Data Coding, Formatting, Transmission, and Security • Relevance • Business • Clinical • Health Care Quality and Cost Review • Feasibility • Operationalize • Scale • Health Care and Admin Costs • Marketplace • Contribute & Learn Best Practices • “Do No Harm” • Unintended Consequences

4. Innovation - Diabetes Health Plan • Pre-Diabetic and Diabetic Focus • Incentives to join plan, enroll in registry, and manage clinical outcomes • Lower costs to enrollee and to employer • Value-based benefit plan design—zero or lower co-pays • Offers individual coaching, incentives and online tools to manage the conditions consistent with ADA guidelines • Chronic case management to help manage A1C, Cholesterol and BP • Failure to comply  standard health plan benefits as disincentive • Goal is prevention of disease onset, unnecessary ER visits and inpatient stays • Plan is currently in pilot phase with 6 large national employers

5. Almost 10 Years After IOM’s “Chasm” Report • The current RBRVS-based system is flawed • Rewards volume and not outcomes • Rewards procedures > cognitive services • Fails to promote preventive and wellness • Fails to reward care coordination, efficiency, or quality improvement • Rewards specialists > primary care • Doesn’t reward IOM’s quality aims of: patient-centered care, safety, effectiveness, efficiency, timeliness (access) or equitable care • “You get what you pay for, and you don’t get what you don’t pay for” • How to build a new system on current platform? • Knowing what doesn’t work ≠ knowing what does

6. Pay for Performance is Widespread • Inventories of programs across all types of payers document nearly 150 pay-for-performance programs1 • In a national survey, 52% of HMOs (covering 81% of enrollees) report using pay for performance2 • Medicare to implement hospital pay for performance (delayed from FY2009) • Rigorous (controlled) studies of pay-for-performance in health care are few • Overall findings are mixed: many null results even for large dollar amounts • Recent findings from Medicare demo, National Health Service GP Contract, IHA suggest modest improvements in many but not all measures and some “gaming”—No Breakthroughs 1. The Leapfrog Group and MedVantage, 2007. 2. Rosenthal MB, et al. Pay-for-Performance in Commercial HMOs. New England Journal of Medicine, November 2, 2006.

7. Can Payment Drive Delivery System Reform? • $$ must be directed to patient-centered, effectiveness and efficiency outcomes • ACOs meet “5 criteria”? • Key challenges-- • Expand nationally endorsed measure set • More measures • More specialties • Address efficiency measures, as well as quality and patient experience • Appropriate use and over-use • Raise the bar for “attainment” • Incrementally reward “improvement” • Accelerate transparency • Standardize data aggregation efforts • Include significant incentives that impact upside/downside risk • Bundle payments—e.g., PCMH, capitation w/ fixed/variable components

8. Innovation—UHC Patient-Centered Medical Home • Focus on primary care physicians to provide coordinated care to enrollees • Pilots in AZ, RI, CO, OH, and NY • Redesigned payment program focused on quality and cost outcomes, and not just volume • Goals to improve access, health care quality, costs and service • Help physicians transform their practices • Reduced unnecessary hospitalizations, ED visits, specialty referrals, lab tests, and Rx.

9. Innovation--PCMH and Bundled Payments Bundled payments (Patient-Centered Medical Home) Fixed pre-payment fee FFS payment for medical and preventive services Office transformation Care management Variable payment Quality Efficiency Structural transformation Template for future performance-based contracting FFS model Capitation PCMH pilots have demonstrated 29% fewer emergency room visits, 11% fewer hospitalizations that primary care can prevent, and 6% fewer in-person visits