Pay for Performance Trends - Bridges to Excellence in Minnesota

1. Pay for Performance Trends - Bridges to Excellence in Minnesota MNACHC Annual Conference October 13, 2006

2. Who is the Buyers Health Care Action Group? The Buyers Health Care Action Group is a coalition of public and private employers working torecreate the health care systemso consumers will get the care they needin theright place, at theright timeand attheright price. We develop purchaser strategies and seek out consumer information tools that promote asafe, timely, efficient, effective, equitable and patient-centered health care system.

3. Allina Hospitals Alliant Techsystems AMS Barry Wehmiller Berlex Labs Cargill Carlson Companies Medtronic Minnesota Life MN DOER Olmsted County Park Nicollet Resource Training and Solutions Rosemount SUPERVALU Sanofi-Aventis Target Corporation St. Jude Tennant TCF Financial University of Minnesota US Bank Ceridian ELCA General Mills GSK Honeywell Jostens 3M Land O’ Lakes Merck & Co. Wells Fargo BHCAG Members

4. Fifteen years of market driven reform • First RFP established long term relationship with Health Partners - “Choice Plus” benefit program is created • The Institute for Clinical Standards Integration is formed in response to the request for treatment guidelines and clinical quality improvement • The Minnesota Health Data Institute is created to gather and publish health care information for consumers • The Robert Wood Johnson Foundation provides five year funding for the Minnesota Health Partnership on Integrated Disability Management

5. Fifteen years of market driven reform • The Department of Employee Relations joins BHCAG, demonstrating the value of public/private relationships • Nationally recognized Direct Contracting Model featuring defined contribution, risk adjusted payment methodology and “tiered networks” is introduced • BHCAG publishes consumer report cards • BHCAG creates the Excellence in Quality Awards to provide cash and recognition to providers demonstrating superior quality improvement • BHCAG spins off new for profit health plan, Patient Choice Healthcare, Inc.

6. Fifteen years of market driven reform • BHCAG provides seed grant to new non-profit organization, HealthFront, comprised of providers, employers and consumers • BHCAG creates a National Data Cooperative providing members the tools and analytic support needed to support strategy development and decision making • BHCAG, a founding “frog”, becomes a regional lead in the implementation of the Leapfrog Group patient safety criteria • With BHCAG support and direction, the Minnesota Hospital Association achieves 100% participation - in both urban and rural hospitals - posting information to the Leapfrog website

7. Fifteen years of market driven reform • Advocated for the creation of the Adverse Events Reporting Act; provided financial assistance for implementation • Founded the Broad Alliance of Minnesota Purchasers; later embraced by the Governor as the “Smart Buy Alliance” • Assist in development of statewide HIT policy and direction through participation on HIT Advisory Committee and Board of Directors for Minnesota Health Care Connection • Created the BTE Guiding Coalition and led the implementation of Diabetes Care Link P4P program statewide (226,000 covered lives and counting!) • Gained broad acceptance of eValue8 as an evaluation, reporting and market reform tool, in both the private and public sector

8. Value Based Purchasing - Pay for Performance - Rewarding Results • The Quality Chasm recommendation - align incentives and create rational payment systems • Value Based Purchasing = Measure, Report, Reward • P4P Gaining momentum: • more than 84 payer programs nationally in November 2004 • 125+ payer programs in November 2005 • CMS (Federal Medicare and Medicaid Agency) Programs • Premier Hospital Quality Incentive Program • Physician Group Practice Demonstration • Chronic Care Improvement Program • others

9. Bridges to Excellence (BTE) –The National Program • Started by GE, Verizon, Ford, UPS and other large employers to accelerate quality improvements in local markets by leveraging their collective purchasing strength • Rewards physicians for • Diabetes care • Cardio-vascular disease care (CVD) • Physician office link (POL); coordinating care, results reporting, e-prescribing, performance reporting, use of information technology • Overall focus is on re-engineering physician office practices to increase quality and improve efficiency • Individual physicians are accredited by NCQA (National Council of Quality Accreditation) • Gaining momentum • 100+ employers participate in BTE nationally

10. NCQA Measure set Physician Activation Consumer Activation • Physician Office Link (POL) • Physician Practice Connections (PPC) • Up to $50 pmpy • Physician-level report card, and patient experience of care survey • Diabetes Care Link (DCL) • Diabetes Provider Recognition Program • Up to $100 pdppy • Diabetes care management tool, and rewards for care compliance • Cardiac Care Link (CCL) • Heart Stroke Recognition Program (HSRP) • Up to $160 pcppy • Cardiac care management tool, and rewards for care compliance Three Programs or “Modules”

11. Why Minnesota? • Employer leadership and collaboration • History of successful provider collaboration • Demonstrated health plan collaboration and innovation • Minnesota defined as Stage IV in application of the Market Model for patient safety. Readily transferable to other quality improvement efforts • Acknowledgement • Differentiation • Innovation • Reward

12. Providers and health plans develop consensus on evidence based guidelines, relevant measures, and provide implementation support Aggregate payer data, review physician performance according to ICSI measures, publicly report results Reward performance through existing health plan programs and BTE Minnesota Building Blocks

13. Building on Existing Minnesota Best Practices • Institute for Clinical System Improvement (ICSI) developed measures and obtained physician consensus on levels of performance (MN measures are higher than NCQA measures) • Must meet all four (for CVD) or five (for diabetes); not just one • Measures on outcomes, not process • More aggressive outcomes, e.g., HgbA1c of <7 not <8 • Minnesota Community Measurement (MCMN) - data aggregation, quality review, public reporting for increased transparency • Using MNCM reduces administrative costs by 66% over BTE costs in other markets • Consensus reached on consistent measures to be used by all payers for rewards

14. Why Diabetes for Minnesota BTE? • Common direction - community-wide return • Builds momentum and greater rationale for physician re-engineering efforts • Minnesota is a P4P state but programs are not aligned • It’s needed - the current “best” is poor • 12 % of patients meet Optimum Diabetes Care (all 5 “easier” criteria) today • Goal of 30% in 2007 • QCare goal - 80% by 2010 • Provide influence on strategy and future programs

15. 3M BHCAG Blue Cross Blue Shield Carlson Companies Community Measurement Fairview Medical Group Health Partners Institute for Clinical System Improvement (ICSI) Medica Minnesota Medical Association Stratus State of Minnesota Department of Employee Relations State of Minnesota Department of Human Services The MN BTE Guiding Coalition MN BTE is governed by representatives from key community stakeholders to ensure collaboration, consensus and the success of the program.

16. The MN BTE Champions of Change • 3M • Carlson Companies • General Electric • Honeywell • Medtronic • State of Minnesota Department of Employee Relations • State of Minnesota Department of Human Services* • Visiant (formerly Josten’s)* • Wells Fargo * New champions for 2007 The Champions of Change are early adopters of MN BTE. These entities are taking the lead in publicly signaling the medical community that health care purchasers want to pay and reward providers for optimal care, not quantity of services performed.

17. In 2006, Minnesota BTE will pay for... • Optimal diabetes care - 5 measures must be met by each patient • HbgA1c < 7 • LDL < 100 • BP < 130/80 • Non-smoking status • 40 y.o. + daily aspirin use • Performance threshold • Goal of 10% of diabetic patients (9 out of 53 medical groups)

20. Why Diabetes and Cardiovascular Disease • Diabetes and CVD are two of the most prevalent and fastest growing chronic illnesses in the United States. • In 2002, diabetes cost $132 billion in medical expenditures and lost productivity* • 11% of U.S. health care expenditures • Affects estimated 15.7 million people (30% are undiagnosed) • 62.6 million visits to doctors • Estimated cost of some form of heart disease in 2006 is $403 billion (up from $298B in 2001)** • Affects 1 in 5 Americans (60.8 million people) • Quality of care received varies considerably from physician to physician. • Diseases have a tendency to be co-morbid; an estimated xx of people with CVD also have diabetes. • Proven return on investment when patients receive optimal care for these diseases. * American Diabetes Association ** American Heart Association

21. Diabetes CVD Hgb A1c <7 NA LDL <100 <100 One aspirin daily 45+ years All Smoking Non-smoker Non-smoker Blood Pressure 130/80 140/90* 130/80 if diabetic In 2007, Measures of Optimal Care

22. MN BTE – the Advantages • Program developed in late 2004 and 2005, with first rewards paid in 2006 to nine medical groups for Optimal Diabetes Care; Cardiovascular Disease added in mid 2006 • Builds on existing, locally accepted measures, processes, methodology - accelerating provider buy-in • Higher performance targets and incentives for improvement every year (national program is every 3 years) • Utilizes established infrastructure to minimize administrative costs (MN Community Measurement) • Additional transparency on performance for all medical groups (national program is only for providers who apply to be accredited) • Incorporates national BTE principles and approach to pay for performance, but is modified for our unique market structure • Approved by BTE and viewed as a pilot model for other markets

23. Minnesota BTE Long Term Goals • Include small employers without burdensome administrative fee • Include public sector clients • Include small physician practices by promoting adoption of technology and services that support re-engineering • Reward group practices while assuring individual physicians within groups are measured and rewarded

24. Think Nationally; Act Locally • National health care problems can turn into action by considering local health care market, resources, economics, and culture • Build on existing initiatives and local strengths • National quality standards (or higher) • Local reporting (for now) • Payment from local and national payers

25. For more information Carolyn Pare CEO Buyers Health Care Action Group 7900 International Drive Suite 1080 Bloomington, Minnesota 55425 cpare@bhcag.com 952 896 5185