Case Studies in Quality Based Purchasing

1. Case Studies in Quality Based Purchasing Meredith Rosenthal, Ph.D. Acknowledgement: Financial support for this work was provided by the Agency for Healthcare Research and Quality.

2. Overview • 4 case studies of QBP implementation • Pay-for-performance and public reporting of quality information • Cases selected to inform new entrants • Lessons learned in implementation • Key questions/issues for discussion

3. Maine Health Management Coalition (MHMC) • Business and health coalition with multi-stakeholder involvement (150,000 lives) • Quality measurement and reporting initiative for primary care and hospitals preceded pay-for-performance • Primary care pay-for-performance extended to all practices in the state • Hospital pay-for-performance pilot

4. MHMC Primary Care Pay-for-Performance • Funding: willing (not all) employers and health plans contributed to a fixed bonus pool ($400,000) • Measures: • Office system survey developed to assess capacity for patient management • Administrative measures for appropriate screening, medication, prevention • Practice-reported data for chronic care management and intermediate health outcomes (e.g., blood pressure control) • Bonuses determined based on overall scores and number of patients

5. Key Lessons Learned • Collaboration critical to successful launch: Coalition provided the ground for productive give and take between payers and providers; 14-member physician steering committee had substantial role in measure selection • Leverage outside expertise: MHMC used a national expert to help develop useable report card; local academic resources also tapped; experts brought resources, legitimacy

6. Hudson Health Plan • Prepaid health services plan in NY State serving 55,000 Medicaid and SCHIP enrollees • Began pay-for-performance in 1999 with state payment rate increase using existing quality data from internal quality review; payments depend on ranking – everyone gets something • Added specific programs using better data for preventive care, SSI needs assessment, diabetes care; payments are for every patient whose care meets guidelines (e.g. $300 for well-managed patient with diabetes)

7. Key Lessons Learned • Phase in the program: use existing data, start small, garner interest/support; tackle harder (more meaningful) goals later • Communicate frequently with providers: educate about program, provide assistance with tools for improvement (i.e., don’t assume building a technically nice program is enough)

8. Ohio Long-Term Care Consumer Guide • Department of Aging • On-line tool for consumers and families to make quality-based choices • Structure, measures of quality collecte by CMS, resident and family experiences • Funding: initially through civil penalty pool; then fees assessed facilities annually • State subsequently legislated nursing home pay-for-performance based on same measure sets

9. Key Lessons Learned • Talk (listen) to consumers first! • Seize the moment: market factors led to facilities being eager to undertake effort • Collaborate with providers: facilities helped make way for legislation, working together increased trust, willingness to accept standards

10. Colorado Business Group on Health • Statewide business coalition • Hospital report card • Collaboration with Colorado Hospital Association • AHRQ IQI measures populate report card; Colorado Hospital Association statewide discharge data were used

11. Key Lessons Learned • Identify a few champions: to gain the backing of the hospital association, support from within was built • Rely on well-established measures: for provider acceptance, validated measure sets are best; AHRQ provides software to compute risk-adjusted quality measures • Engage local employers: it is not obvious to all employers that they have a role to play in quality improvement

12. Questions/Issues to Consider • Where is there most to gain from collaboration within a market (across payers, stakeholders)? • Should public reporting come first? Or last? • How do you build a case for transparency with providers? • Where is the low-hanging fruit in this market: existing data? problems with known solutions (local models?)? Major quality deficits? Quality deficits that could result in total cost savings if fixed? • What message works to convince employers, other purchasers that investment in quality based purchasing is worthwhile? • Are there good (cheap? systematic?) ways of learning what information consumers want (and how they want it)? • Is there a sustainable business model for collecting and publicly reporting quality and cost data? • Is the need for collaboration and alignment of performance measurement and payment compatible with health plan competitive strategies? • How can free-riding be minimized (some payers contribute to QBP efforts but others just reap the benefits)?