Healthcare Incentives & Payment Pilot: Creating accountable care through payment reform

1. Healthcare Incentives & Payment Pilot:Creating accountable care through payment reform Funded by: Supported by:

2. Grantee: HCI3 • Continue strong not-for-profit mission to significantly increase value in health care • Independent Board of Directors comprised of providers, payers, employers • Focus on rigorous, transparent, fair and objective measurement of cost and quality of care • Broad portfolio of programs to support payer activity in market change

3. Intent of the Project • Determine the feasibility of payment reform in various parts of the State by convening stakeholder groups that will analyze data from private and public health plans. • Stimulate the creation of accountable care centered around the patient, leading to higher quality of patient care while controlling the increase in total cost of care. • Obtain buy-in from physicians, hospitals, employers and health plans as a key step to ensure a successful implementation.

4. The Opportunity • Today, there are an estimated one million Coloradans with a chronic illness • the single biggest class of health care services users and • the most prone to suffering gaps in care. • These gaps create complications, most of which are either fully or partially avoidable - estimate at roughly 50 cents on every chronic care dollar spent across all population types. • As such, the opportunity to increase quality while controlling costs in this population is significant.

5. Study Grant Design • Data Analysis Phase • Plan data extractions • ECR PAC analysis • Share PAC results • Pilot Implementation Designs • Designate “Design Pods” • Pilot site implementation plans • Secure Implementation Grant

6. Study Structure Plan / Payer(s) Providers CIVHC CMS CCGC C-Suite Physician Leadership Steering Committee Data Analysts (SAS) Quality Management CBGH HCI3 Tools IT IT Programs Network Management Tech. Steering Committee Business Management EMRs CORHIO Registries

7. Prometheus Payment Effort started in 2006 Funded by RWJF and the Commonwealth Fund, NYS Health Foundation and the Colorado Health Foundation All work is transparent….methods are freely available and open to comment on web site More information at www.prometheuspayment.org 7

8. Bridges to Excellence Started in 2003 Led by employers and physicians Focused on recognizing and rewarding physicians that achieve benchmark performance in management of patients Created the first program to recognize practices that had good systems – now known as the Physician Practice Connection – Patient Centered Medical Home All performance assessment methods are transparent and physicians have full control over review of data More information at www.bridgestoexcellence.org 8

9. Glide path for payment reform Savings Provider Risk

10. HCI3 Tools and Programs • Nine core programs to measure physician quality – condition-specific and office systems. Two custom programs to measure overall PCP quality – prevention and chronic conditions. And an operational system for automated assessment using EMRs • Twenty one programs to measure cost of care – seven chronic, three inpatient medical, ten procedural, and pregnancy-delivery – and comprehensive analytical package that any plan can run • All of these can be mixed and matched to create the highest value • All are fully operational

11. A Few Definitions Prometheus Evidence-informed Case Rates (ECRs) – Episodes of care that are based on clinical practice. Modeled using a national database of commercially insured. ECRs are “normalized” by running the analytics through the plan’s database. BTE Performance Measures – Modules that measure a physician’s quality of care by chronic condition and can be combined to create a practice-wide scorecard. The physician’s own medical records are used to collect the data for measures. 11

12. How ECRs and Measures Fit Together

13. Prometheus ECRs • Chronic Medical (7) • CAD • Diabetes • CHF • COPD • HTN • Asthma • GERD • Acute Medical (3) • AMI • Stroke • Pneumonia • Other (1) • Pregnancy & Delivery • Inpatient Procedural (5) • Hip Replacement • Knee Replacement • Bariatric Surgery • Colon Resection • CABG • Outpatient Procedural (5) • Knee Arthroscopy • Colonoscopy • Cholecystectomy • Hysterectomy • Angioplasty (PCI)

14. Risk Allocation in the PROMETHEUS model Global Cap Total Cost of Care “Coarse” Episodes Reliable Care Total Relevant Costs of a Specific Episode Typical Costs of Episode Costs of all Potentially Avoidable Complications(and other provider-specific variation) ECRs Costs of all Base Services Costs of all Severity Adjusters Insurer – Probability risk Provider – Technical risk Consumer – Probability risk 14

15. An ECR is priced for each patient-provider-payer combination Total ECR price = Type of services x Frequency x Price per service Based on 50% of current defect rate • Allowance for Potentially Avoidable Complications • Margin Currently based at 10% of typical • Severity-adjustment caused by known patient health status Arrived at through step-wise multi-variable regression model • “Normal” variation reflecting practice patterns Adjusts ECR for local patterns Informed by guidelines and empirical data analysis • Core/Typical services that are recommended by best practice or evidence The ECR explicitly removes excess cost of care caused by errors and creates a strong incentive to eliminate defects and improve quality. 15

16. PAC Percents across ECRs

17. PAC% for Diabetes by Plan Min PACs across States in CIP Database

18. AMI example for PAC segmentation 18

19. Channel 2 Input Structure 3rd Party Assessors Quality Engine BTE/Prometheus Quality Scorecard Providers Leapfrog Hospital Scorecard CMS Hospitals Joint Commission Overall Scorecard Physicians EMRs Community Measurement Physician Scorecard Paper Records IPRO 19

20. BTE Care Link Programs • Fully built in 2009 • CAD • Diabetes • Hypertension • CHF • Asthma • COPD • NYC TCNY PCP Scorecard • CDPHP Scorecard • To be built in 2010 • Depression • Hip/Knee • CVRP in collaboration with ACC • Outpatient procedures

21. We have established rigorous and fair requirements • Series of rules and processes to ensure that data are comparable, measurement is consistent, and results are accurate • Requirements for data aggregator to become “BTE-approved registry” • Approval of numerator and denominator values • Successful submission and processing of test data • Successful submission and processing of live data • Successful audit of live data (5% audited) • Agreement to submit data as frequently as quarterly and meet data submission deadlines • Approval is program specific

22. BTE Recognitions through Automated System to date

23. Payment Reform PlanningSteering Committee Purpose Consisting of primary stakeholder groups, the Steering Committee will play an advisory role in gathering and analyzing data from private and public health plans in order to determine the feasibility of implementing the PROMETHEUS Payment model and other Payment Reform initiatives in various parts of the State, focusing primarily on patients with chronic conditions.

24. Payment Reform PlanningSteering Committee Objectives • Advise the study team on the effective, efficient gathering of required public and private sector data without creating redundancy in existing efforts in the public or private sector. • Data extractions from all participating plans by 30 April 2010 • Sharing reports and analysis of data with all participating parties by 31 July 2010 • Participate in the analysis effort such that stakeholders have the opportunity to assess the strength of the analytic methods and determine the opportunity to create better outcomes for Colorado patients. • Make recommendations for an organizational framework to facilitate implementation.

25. Project Planning

26. Reducing PACs can save employers more than $1trillion NEJM Perspective, Sept 10 2009 26

27. RAND-evaluated options for bending the cost curve NEJM Perspective, Nov 11 2009 We can all argue about the math, but the bottom line is pretty clear that “bundled payment” holds a lot of promise.