Pay for Performance (P4P): The Importance of Nursing Informatics Leadership

1. Pay for Performance (P4P): The Importance of Nursing Informatics Leadership Kathleen C Kimmel RN MHA, CHE McKesson Provider Technologies Kathleen.kimmel@mckesson.com

2. Session Goals for the Nurse Informaticist At the end of this presentation the attendee will be able to describe: • What are the factors that driving the P4P initiative? • How much do errors cost? • What is the cost of variation in medicine? • What are the P4P models & initiatives and are they generating successful results? • What is being measured and reported? • What is the Nursing Informaticists role? • What is the future of P4P?

3. FINANCIAL ORGANIZATIONAL CLINICAL What are the traditional approaches to solving our healthcare challenges? • Traditional Angles to Solving Healthcare Problems

4. FINANCIAL Traditional Payer approach was to set prices • Payer Driven Reform • Setting Prices • Medicare - PPS – Diagnostic-Related Groups • Medicaid - state managed care initiatives • Commercial - progressive reduction in contract offer • Provider Response to Maintain Revenues

5. The traditional organizational approach focused on HMOs and Providers Organizational approach • HMO’s – control access • Channel Patients • Capitation • Gatekeepers • Case Managers • Providers • Integrate Delivery Systems • Compete on Price ORGANIZATIONAL

6. Take 2 Aspirin What happens when you control access and institute risk sharing with programs with providers (i.e., incentives to reduce healthcare expenditures)? • Some physicians don’t tell patients about their care options • 33% of physicians declined to offer "useful" medical services to some patients because the services weren't covered under their patients' health insurance, • 35% of physicians who declined to offer medical services admit that the tendency to withhold this information has increased in the past five years Health Affairs, July 2003

7. Patients do not receive the treatment they need – under treatment • System still 'routinely' falls short on care: NCQA Between 42,000 and 79,400 Americans die unnecessarily annually because they receive less than optimal healthcare, according to the. The "routine failure to provide needed care" results in $1.8 billion in excess medical costs and nearly 66.5 million potential sick days, including days in which sick employees work but below normal capacity, the NCQA said. The healthcare system appears to be "deeply polarized," with many Americans receiving generally poor care, the NCQA said. National Committee for Quality Assurance's 8th annual State of Health Care Quality report September 2004

8. The clinical approach offers a possible solution to drive reform Clinical Information Driven Reform • Set and Adhere to Practice Standards • Based on Research = Evidence Based • Focus on Disease Management for Chronic Illness • Focus on Prevention • Change Medical Education CLINICAL

9. The high cost of associated with medical errors is a driver for P4P The Cost of Medical Errors

10. What are the factors that contributed to an economic focus on patient safety? 1999 Medical Errors 2001 Evidence-Based Medicine, increased use of IT 2001 Safety, effectiveness, patient-centeredness, timeliness 2004 Keeping Patients Safe: Transforming the Work Environment of Nurses

11. The patient safety focus is a mainstream public concern Consumers have fears about their safety: 63% said they are “extremely concerned” or “very concerned” about medication errors in hospitals, and more than 1/2 are extremely or very concerned about surgical errors. Source: Wall Street Journal, July 20, 2004

12. 60 incidents due to hospital acquired infections 51 incidents related to procedural complications 15 incidents related to falls What do we know about medical errors? The most common errors per 1,000 visits are: 65 incidents per due to adverse drug events Source: The Advisory Board Company, Washington D.C.

13. What are the problems with a paper-based manual system? Handwritten Physician’s Orders • 24% incomplete • 20% illegible National Center for Vital and Health Statistics “A small piece of paper doesn't look like a deadly weapon.” Rob Turner, U.S. News & World Report, August 2, 2004 The 42 year old male patient who took this medication -- Plendil 20 mg qid, which is eight times higher than the maximum recommended dosage – died after two weeks taking the wrong drug. A jury awarded the deceased’s family $450,000. The cardiologist who wrote this prescription and pharmacist who filled it were ordered to each pay half of the award

14. In fact, consider yourself lucky if…

15. P4P Driver: Payers have zeroed in on how much could be saved by reducing errors • Medical errors are responsible for 30% of the price of healthcare • More than 50% of the $17- $29 billion national cost associated with medical errors is preventable • Medical errors cost 10-15% of a hospital’s annual operating budget Task Force on Healthcare Cost Control, March 2002 • ADEs are responsible for $2 billion per year nationwide in hospital costs alone. Bates DW, et al. JAMA. 1997;277(4):307-11 • One ADE adds more than $2,000 on average to the costs of hospitalization Classen DC, et al. JAMA. 1997;277:301-306

16. Employers are concerned over the cost of health insurance premiums -- funding an inefficient healthcare system that does not reward quality.

17. Errors are costly in other ways… What happens with a high profile error? • Your organization is swamped with the news media! • You experience a nightmare of audits -– audits lead to more audits FUD factor for patients – complaints and legal inquiries can triple! • Write offs of hospital charges plus settlements • FUD factor for patients – up to 3x risk management complaints • Market share impact • An estimated $428 billion is spent each year in liability litigation and defensive medicine“Healthcare at the Crossroads: Strategies for Improving the Medical Liability System and Preventing Patient Injury” JCAHO

18. Besides errors, what else is a cost issue driving P4P? Variation in Medicine

19. Dartmouth Atlas of Healthcare 1999 Payers are zeroing in on the cost of variances between markets • Variability in PracticeBreast Cancer Screening -- Medicare Traverse City, MI 50.1% Fort Lauderdale, FL 41.8% Birmingham, AL 32.0% Columbia, SC 19.6%

20. Drs. Chae Moon and Dr. Fidel Realyvasquez Jr. Redding Medical Center - FBI raid Oct. 02 2002 Hospital Company pays US Government $54 million in August 2003 to resolve liability for medically unnecessary procedures September 2003 HHS' inspector general's office began proceedings to exclude Redding (Calif.) Medical Center from federal healthcare programs. Senate Finance Committee joins the investigation July 16 2004 Hospital Company sells hospital to Health Partners of America. Dartmouth Atlas of Healthcare 1999 The variability is remarkable between regional markets • Variability in PracticeCoronary Artery Bypass Grafts /1000 - Medicare Redding, CA 11.5 Bloomington, IL 9.8 Santa Rosa, CA 3.6 Albuquerque, NM 3.1

21. Dartmouth Study says more care is not better • The Dartmouth Study – Wennberg et al – 90,616 Medicare patients treated for cancer tumors, congestive heart failure, and chronic obstructive pulmonary disease treated at 77 of the top US hospitals – Patients with large amounts of care did no better than those who went to facilities that provided less care. In fact, extra Dr. visits, longer hospital stays, more tests and more consults appear to have hastened death Journal of Health Affairs October 2004

22. And it is not just variances… NEJM study shows that basic care is often not up to quality standards • Adherence to quality indicators – by condition N Engl J Med 2003;348:2635-45 Clinical Quality Guidelines NEJM June 26, 2003

23. If the population is not getting the proper care they need who pays the bill down the road? Welcome to Medicare! • In 1999 People 65+ (13% of the population): • accounted for $387 billion ($11,089 per person) or 36% of U.S. healthcare spending • consumed an average of $11,089 each (4 x as < 65) • CMS' Office of the Actuary Dec. 6, 2004 • By 2014 CMS says government will pay ½ of health care costs Heffler et al., Health Affairs, February 23, 2005

24. P4P “There are about 80 new P4P programs operating this year, involving about $200 million” Meredith Rosenthal, Assistant Professor for Health Economics and Policy Harvard School of Public Health – October 8, 2004

25. The goal of P4P is to align payment with quality “Current payment mechanisms allow and even reward defective care because they are unable to award future benefit.” Letherman et al, Health Affairs, Vol. 22, 4/2003

26. There are several different P4P models some providing incentives for IT • Cost Differential Programs – employers or payers offer patients: • Reduced co-payments or deductibles for visits to providers who meet quality measures (e.g., Boeing, Blue Shield of CA) • Direct Reimbursement Programs – payment to providers for: • New types of care, including online consultations between patients and providers. The AMA has a Current Procedural Terminology (CPT) code for online visits (e.g., Blue Shield of CA, Blue Cross & Blue Shield of MA, and First Health in Illinois, now pay for online consultation) • Shared Withholds – portions of reimbursement are withheld until a provider meets IT implementation targets or quality goals through the use of technology • Collaborative Programs – designed to reduce the initial costs of technology for providers (e.g., the American Academy of Family Physician’s Partners for Patients Program) Foundation for eHealth Initiative and the Health Strategies Consultancy report April 2004 • Grants to Help Docs Automate Records Central Massachusetts Independent Physicians Association offers each of its 150 member physicians a grant of up to $5,000 to purchase electronic medical records software. The IPA estimates about 5% of physicians in the state use electronic medical records (September 02, 2004) Health Data Management

27. P4P began with efforts to monitor providers’ quality AHRQ– Agency for Healthcare Research and Quality, hospital performance measures CMS – Centers for Medicare and Medicaid Services, public reporting initiative QIO – Quality Improvement Organization, (The American Health Quality Association -- Medicare’s state review organization, formerly PRO). CMS 7th SOW 10 quality measures CMS plans to expand the scope of quality improvement organizations to help "fill in the gaps between known good practice and actual practice," and improve the adoption and use of healthcare IT. CMS Administrator Mark McClellanSept. 2, 2004 National Voluntary Hospital Reporting Initiative (NVHRI) – uses the 10 CMS 7th Scope of work. JCAHO – Joint Commission for Accreditation of Healthcare Organization’s, hospital core measures (average survey cost is $29,191 in 2005) LFG– The Leap Frog Group, Patient Safety Initiatives NCQA– National Committee for Quality Assurance [The 2005 Health Plan Employer Data and Information Set (HEDIS) will track Medicare beneficiaries’ tracking for glucoma, beta-blocker long term usage for 6 months following MI and physical activity advice] .

28. And now, quality data is readily available to the public http://www.healthgrades.com

29. Doctor scorecards are now available on line • Care Focused Purchasing – 28 large employers (Sprint, Lowe’s, BellSouth, Morgan Stanley, JC Penny, etc.) teaming up to deliver Dr. scorecards to employees WSJ March 2004

30. Hospitals P4P will also be linked to patient satisfaction • CMS released its draft patient-satisfaction survey for hospitals. An initial survey is expected to be available in 2005. Modern HC November 16, 2005

31. Reporting quality for CMS is no longer “voluntary” Prospective Payment Rates for Hospital Inpatient Operating Costs for FY 2005 • CMS will increase the FY 2005 payment by 3.3% for hospitals that submit performance data on 10 designated quality measures as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). A reduction of 0.4 percentage points; will apply for hospitals that fail to submit data relating to the quality of inpatient care. • The 10 measures are in 3 categories: • Acute Myocardial Infarction (AMI) – ASA on arrival, ASA prescribed @ discharge, ACE inhibitor for left ventricular systolic dysfunction, Beta blocker @ arrival, beta blocker prescribed @ discharge • Heart Failure (HF) – Left ventricular function assessment, ACE inhibitor for left ventricular systolic dysfunction • Pneumonia (PNE) – Initial antibiotic w/in 4 hours of admission, pneumococcal screening and/or vaccination, oxygenation assessment. August 23, 2004

32. Why is CMS singling out certain areas to concentrate on? • A small number of illnesses -- many of them preventable -- account for most of the spending increase. Emory University health economist Kenneth Thorpe tracked 370 conditions and found that 15 accounted for 56% of the $200 billion rise in health spending between 1987 and 2000. Five conditions accounted for one-third of the increase, with heart disease topping the list, followed by pulmonary conditions, mental disorders, cancer and hypertension. Health Affairs. (Aug. 25, 2004)

33. Some examples of P4P • Employer Coalition (Ford, GE, Proctor & Gamble, UPS, and Verizon) – April 2003, Pay up to $100 million in annual bonus for physicians who improve quality in 3 areas: • Diabetes care • Heart disease treatment • Medical office modernization • Integrated Healthcare Association - Six CA health plans (Aetna, BC of California, Blue Shield of CA, CIGNA CA, Health Net & PacifiCare) requires 2.7 patient visits per patient/year. Pays up to $150 million per year to medical physicians for documented performance. Requires average of groups based on: • Treatment of chronic conditions • Childhood immunization • Cancer screening rates • Use of information systems • Patient satisfaction scores

34. P4P Examples • HHS and Premier Hospital Alliance – Began June 03. Objective to demonstrate a new performance based payment system. As of October 2004, 278 organizations are participating -Dubbed “Tournament Style” No ROI – costs more $$ to collect data • 5 Clinical Areas • Coronary Artery Bypass Surgery • Heart Attack • Heart Failure • Hip & Knee Replacements • Pneumonia • Bonuses and Penalties • Top 10% Hospitals receive 2% bonus • 2nd 10% Tier Hospitals receive 1% bonus • Bottom 10% cut in Medicare payments by 2% (to begin in year 3) • 2nd closest to the bottom decline in payments by 1% (year 3) • BCBS of Illinois and Advocate Health Care – Pays Advocate for meeting specific performance goals. The deal helps Advocate pay for a new $10 million ICU 24-hour monitoring audio-video technology. * *Univ of Iowa study - thetotal costs were $917 less for Hospitalist treated patients -AugustAm J Manag Care. 2004;10:561-568 Visicu.com

35. P4P Continued • Bridges to Excellence – Diabetes Care Link -- Physicians receive annual bonuses of $80 per patient if they adhere to the American Diabetes Association quality carestandards:(Studies show 70% of diabetics do not receive care meeting the ADA standards.) The estimated savings is $350 annually per diabetic patient) Blood sugar tests, • Retinal exams, • Kidney function tests, Results after 1st Year 400 + Boston-area physicians share $800,000 in P4P awards from the Physician Office Link program with the Center for Quality Assurance. . BTE includes Physician Office Link ($50/patient in bonuses) , Diabetes care Link, and Cardiac Care Link ($160/patient in bonuses) Markets are MA; Louisville, KY; Cincinnati, and Albany December 3, 2004 Modern Healthcare

36. P4P continued… • Anthem, Indianapolis and MaternOhio Management Services – MaternOhio manages 33 OBGYN practices in Columbus Ohio. Since 1999 physicians can earn up to 5% more reimbursement for scoring 90% or better on: • Regular Mammograms & Pap smears • Meeting national standards for hysterectomies • Using generic drugs instead of brands • Patient satisfaction • Empire BCBS – January 02, paid a total of $195,000 to 29 New York hospitals that met at least two of the three Leapfrog Group patient safety standards: As of July 2004, Leapfrog is in 24 regions = ½ US population and 1,207 hospitals.. • CPOE (reduce serious prescribing errors by more than 50%) • ICU physician staffing (reduce risk of dying by 10%) • Evidence-based referrals (reduce risk of dying by 40%) • NCF- Endorsed set of safe practices (see handouts) – new 2004

37. P4P continued… • Aetna – Aexcel October 1, 2003 Steer patients to specialists who meet standards of care plus quality and cost efficiencies. Incentives for members involves lower co-pays to visit preferred specialists Areas: • Dallas/Ft. Worth • Northern Florida • Seattle • More markets over 2 years Specialties (highest spending) • Cardiology • GI • OB/GYN • General Surgery • Orthopedics:

38. Consumers don’t get it… Consumers want quality data, not quality bonuses • 80% said they want to choose doctors using "Consumer Reports"- style quality ratings. • The #1 reason for not supporting pay-for-performance measures was the belief that physicians already make enough money and are bound by their oath to deliver the best quality care regardless of any cash bonus. American Healthways Study - November 11, 2004

39. Medical errors could be a violation of the Federal False Claims Act if CMS is charged for services related to the error • False Claims Act • Also called the Lincoln Law – enacted in 1863 to prosecute Civil War profiteers who shipped boxes of sawdust and billed for boxes of guns or resold the same cavalry horses several times. • Updated in 1986, includes: • Whistleblower Awards of 15-20% of the settlement • Treble damages plus $5,000 - $10,000 per false claim • Hourly court/prosecution fees Senate Finance Committee Chairman Charles Grassley (R-Iowa), is adding more stringent penalties to the Senate version of the Medicare Reform bill. • Could be used when: • Errors stem from staff shortages • Unnecessary or incorrectly performed procedures • Failure to provide appropriate care • Errors due to not following proper procedures Modern Healthcare, V 33/No. 26, June 30, 2003

40. Now a Minnesota payer is not paying for medical errors • HealthPartners, a large Minnesota health plan, is the first to penalize for errors -- as of Jan. 1, 2005 they no longer pays for errors: • Criteria is based on a list of "nevers" -- such as surgery performed on the wrong body part or on the wrong patient, and leaving a foreign object in a patient after surgery. Modern HC October 06, 2004

41. P4P is changing physicians’ choice of patients • NY Doctors say Report Cards Sway their Decision to OperateSome 79% of the doctors said that the knowledge that mortality statistics would be made public had, at times, influenced their decision on whether to operate. • Cardiologists in New York say they may not operate on patients who might benefit from coronary angioplasty because they are worried about hurting their rankings on physician scorecards issued by the state. • The survey, sponsored by the School of Medicine and Dentistry at the University of Rochester, demonstrated the difficulty many doctors have with public disclosure of performance data. New York Times January 11, 2005

42. The Role of Nursing Informatics in P4P

43. Part of the challenge is collecting the data • Over 400 publicly defined indicators based on clinical evidence and industry recognized metrics • Process measures (~90%) • Right treatment or drug at the right time • Appropriate patient assessment, education, instruction • Outcomes measures • Mortality • Post operative complications • Readmissions • Measurement presents some challenges…

44. It is a major effort for hospitals to collect and report data

45. Reporting Virtually all of the study populations are defined by using extensive inclusion/exclusion criteria requiring a combination of clinical, demographic, diagnosis, and procedure data Variable definitions Not all agencies and initiatives agree on the definition of a measure This creates varying results, confusion, and loss of credibility Numerator Statement: AMI patients whose time from hospital arrival to thrombolysis is 30 minutes or less. Data Elements: Arrival Date Arrival Time Thrombolytic Administration Date Thrombolytic Administration Time Denominator Statement: Included Populations - Discharges with: An ICD-9-CM Principal Diagnosis Code for AMI as defined in Appendix A, Table 1.1 AND ST segment elevation or LBBB on the ECG performed closest to hospital arrival AND Thrombolytic therapy within 6 hours after hospital arrival Excluded Populations: Patients less than 18 years of age Patients received in transfer from another hospital including another emergency department Data Elements: Admission Date Admission Source Birthdate ICD-9-CM Principal Diagnosis Code Initial ECG Interpretation Thrombolytic Administration Transfer From Another ED Risk Adjustment: No The measurement challenges are many

46. Measurement can create fiscal challenges Cost to Report Performance Measures • Data collection • Over 90% of the measures require the use of data that is not readily available in current administrative data sets • This means manual chart review Revenue Impact of CMS P4P (.4%) Net

47. Informatics Nurses can lead the process towards an integrated view of clinical process compliance and performance measures What are we supposed to be doing to improve care and performance? Are we doing what we are supposed to for each patient today? Decision Support Data Aggregation Monitoring Measurement Reporting Data Transformation User Education Reporting & Presentation Baseline Population-level Process Improvement Patient-level Process Improvement

48. Capture Data Analyze and Aggregate Data Quality and verification Provide structured templates Required fields & prompts Protocol adherence EMPI Clinical Data Repository Reporting Tools Nursing care research Rules Engines Care & alerts Dashboards Data warehouse and Marts Informatics Nurses will oversee efforts to integrate CIS

49. ASA within 24hrs. of admission ASA on D/C ACEI for LVSD Adult smoking cessation instructions Beta Blocker ordered at D/C Beta Blocker within 14 hrs. of admission Time to Thrombolysis (30 min.) Time to PTCA (120min.) Inpatient mortality Examples of where and how you would collect the data in clinical information system • Charge code on day 1 or 2 • Discharge Instructions • Charge code + Dx code + imaging result • Nursing activity • Discharge instruction • Drug admin time • Drug admin time • Procedure start times • Procedure start times • Discharge status

50. The Future of P4P