Multi-stakeholder Payment Reform and System Redesign: Working Together to Improve Healthcare Value

1. Multi-stakeholder Payment Reform and System Redesign: Working Together to Improve Healthcare Value Elizabeth Mitchell CEO Maine Health Management Coalition

2. Maine Health Management Coalitionwww.mhmc.info Employers 16 Private Employers 5 Public Purchasers Providers 21 Hospitals 14 Physician Groups Health Plans 5 Health Plans The MHMC is a purchaser-led partnership among multiple stakeholders working collaboratively to maximize improvement in the value of healthcare services delivered to MHMC members’ employees and dependents. The Maine Health Management Coalition Foundation is a public charity whose mission is to bring the purchaser, consumer and provider communities together in a partnership to measure and report to the people of Maine on the value of healthcare services and to educate the public to use information on cost and quality to make informed decisions. Collectively 35% of Comm. Market 1

3. quality / outcomes + Value = improved health + employee satisfaction cost Best quality health care Best outcomes and quality of life Most satisfaction For the most affordable cost For all Maine citizens MHMC Value Equation

4. Maine’s Economy Has Moved From Manufacturing to Healthcare Manufacturing Health Care Manufacturing Health Care

5. Maine Has 5th Highest Insurance Premiums in U.S. For Singles Maine

6. 20-25% of Chronic Disease Admits Return Within 30 Days

7. Maine Has 3rd Highest Rate of Surgeries in U.S. Maine

8. But Inpatient Utilization Is Low, Meaning Cost/Day is Higher Portland Source:CommercialCostVariationbyHospital ReferralRegion,MillimanAugust 2010

9. Spending on Physicians is Below Average Portland Source:CommercialCostVariationbyHospital ReferralRegion,MillimanAugust 2010

10. Multiple Cost Drivers Require Multiple Strategies

11. 4 Steps to Improving Health Care Value Performance Measurement and Public Reporting Consumer Engagement Value Based Purchasing Reformed Payment/Effective Incentives

12. Accountability Requires Transparency Meaningful system performance measurement and public reporting is necessary for accountability to purchasers, patients and community. • Transparency of cost, resource use and appropriateness • Transparency of utilization rates and patterns • Transparency of patient outcomes and experience • Transparency of quality and safety

15. State of Maine Tiered Networks Hospital based on PTE Metrics - 2006 Added cost of care w/ quality Aug 2011 PCPs based on PTE Metrics - July 2007 Other Employers/Plan Sponsors Jackson Lab and Barber Foods – January 2011 U Maine System – January 2012 MMEHT – January 2012 Employer Use Employer Use 14

16. Employer members choose if/how to use performance measures Consistency across employers preferred by providers Gradual ‘raising of the bar’ on performance Transparent, multi-stakeholder process important to employees and providers Threshold: Achieving minimum of ‘Good’ in every category (only quality/safety for 5 years) Employer Use Employer Use 15

17. Exceptions made for ACO pilots: ‘Higher value initiatives’ MaineGeneral - Cary PenBay - SMMC Drove provider and employer engagement on delivery system and payment reform RFP for direct contracts: JAX Network Design: MaineSense Employer Use Employer Use 16

20. Cost Variation

21. Publishing Hospital Costs How the data is used is what matters: • Without tiering: Low cost hospitals negotiated higher rates • With tiering: High cost hospitals renegotiating lower rates to be included in network (4.7%)

22. If food prices had risen at medical inflation rates since the 1930’s.*Source: American Institute for Preventive medicine

23. Employee engagement curriculum to develop optimal incentives and engage patients in their role to improve their health and healthcare: • Module 1: Examining What You Have, Determining What You Want • Module 2: Bright Spotting: Best Practice Locally, Regionally and Nationally • Module 3: Securing High Quality Healthcare Services • Module 4: Preventing Poor Health • Module 5: Monitoring Your Benefits Package to Assure the Best Value for Benefit Dollars

24. Some Feedback… ‘I am part of labor representing about 360 members.  My members can not afford a healthcare plan that does not give them the best possible outcome or quality of care. The classes have taught me the buying power of our group. We should not pay for bad results or poor quality of service. As consumers, we need to be more pro-active in our healthcare.’ - City of Portland Employee ‘Before I learned about the work of the Coalition, I thought the only thing I could do about healthcare was complain.’ - Prof. Arthur Hill, UMaine Employee

25. Accountable Benefit Design

26. Employers Pay For: Tests Visits Procedures Prescriptions Errors & Complications Employers Want: Informed Employees Improved Outcomes Care Coordination Prevention Functional Status Return to Work You Get What You Pay For

27. Dr. Steele: The Way YOU Pay is Major Part of Problem! LOSE LOSE ER LOSE LOSE Rests on the head… ?? $$ of a pin $$ $$$

28. Example: Maine’s Transition to Global Payments & ACOs PURCHASERS FACILITATOR PROVIDERS State Employees HealthCommission and UMS Maine General Health MaineHealthManagementCoalition TechnicalAssistance Data Bath Iron Works MidCoastHealthSystem

29. Choosing a Starting Point in Moving to Higher-Value Care ServicesWith Evidence of Over-Utilization ConditionsAffectingMany Patients BestOpportunities forShort-TermSignificantSuccess Low-CostInterventionsWith SignificantShort-Term Impact Willingand Able ClinicalLeadership

32. Payment Reforms Needed that Support Care Changes • It’s not about “risk” or “incentives,” it’s about giving healthcare providers the ability/flexibility to improve outcomes and reduce costs in a way that is financially feasible • Desired changes in care should drive payment reforms that support them, not the other way around • Principal Tools: • Episode-of-Care Payment • Risk-Adjusted Global Payment

33. Payers Need to Truly Align to Allow Focus on Better Care Payer Payer Payer BetterPaymentSystem B Better Payment System A Better PaymentSystem C Provider Patient Patient Patient Even if every payer’s system is better than it was, if they’re all different, providers will spend too much time and money on administration rather than care improvement

36. Many Changes in Care Needed to Achieve Significant Savings

37. Identifying Opportunities and Strategies for Win-Win Savings • Questions to Address: • Is this a desirable opportunity to pursue? • Does the opportunity vary among regions or among employers? • What are the barriers and how could they be overcome? • What does each stakeholder need to do differently to support success? • Employers/Medicaid • Health Plans • Hospitals • Physicians • Consumers/Patients/Families • What additional information is needed to develop the business case for a win-win-win approach and implement the changes?

38. Who, What and How? • Employers • Patient Incentives through Benefit Design/Wellness • Informed purchasing with performance data – reward high performance • Payment reform – pay for what we value (PCMH) • Providers • High-value, coordinated, patient centered care • Shared Decision Making • Increase primary and effective care/Decrease services of limited value • Transparent cost and quality information • Health Plans • New roles, products and reimbursement systems • Patients • Informed choice and engagement to seek appropriate care • Awareness of risks/benefits with reliable information • Personal health responsibility

39. Key Next Steps • Access and use your data • Identify key cost drivers • Quantify and prioritize opportunities • Build partnerships with providers • Set clear goals with physician leaders to change care delivery and lower cost • Do your part- benefit design/reimbursement changes to support accountable care

40. Key Next Steps 4. Expect Accountability • Review transparent data - monitor impact • Reward success • If progress is not made, act