Kathleen Curtin Med-Vantage, Inc. San Francisco, CA medvantage

1. National Consumer Driven Healthcare SummitSeptember 14, 2006Consumer Transparency: Scorecard Implications for Consumers, Providers and Pharmacy Kathleen Curtin Med-Vantage, Inc. San Francisco, CA www.medvantage.com

2. Introduction Scorecards and Transparency for Providers and Consumers Challenges and Success Role of Pharmacy Predictions of What’s Next Agenda

3. Introductions– Med-Vantage Company Overview We build custom physician efficiency and quality measure scorecards and software applications used by health plans to report actionable results to plan members and physicians. Performance Measurement Scoring and Incentive Physician Scorecard Tools and Transparent Reporting

4. What is Transparency? • Providing consumers and providers with performance measures of Quality and Cost • Helps Physicians Help Members • Make informed decisions • Plan treatment • Use healthcare resources appropriately • Delivers Actionable Information to Change Provider and Member Behavior • Reduces trends by promoting greater provider efficiency and member cost awareness

5. Engage and educate health coach / health status (“teachable moments”) What do Members and Doctors Want? Give members a stake, deliver personalized care and cost info Explain how to choose and how to use the benefit effectively Build incentives for personal responsibility Reinforce the partnership with physicians Provide choice and the opportunity to balance care, convenience and cost Influence Member Behavior Provide tools, actionable info to make informed decisions • Communicate quality and cost

6. The issues: Gap in evidence-based care: 55% adherence (McGlynn, NEJM 2003) Double-digit medical cost trends: PWC predicts Medicare Trust Fund erosion by 2020 The response: Presidential Executive Order on Quality and Efficiency NCQA and AMA are developing specialty measures CMS P4P Projects: Premier Hospital, Physician Group Practice Demo, AQA Pilot in 5 States Public reporting in California, Mass, Maine, Minn, etc IOM Report calls for Pay for Performance Employers require performance based purchasing Progress We know why …

7. Balance of care and cost measures New categories – IT adoption, patient experience Evidenced-based or specialty supported measures Statistically reliable and valid - Analysis of frequency and variation - Risk adjust clinical outcome and cost measure - Multiple statistical tests Feasible - Advanced administrative data (LOINC, EMR) - Within the physician span of control Actionable - Improvement requires on time patient detail Measures We agree on principles… Source: Principles for Profiling Physician Performance, Massachusetts Medical Society, 1999 American College of Physicians, 2005

8. We have made progress… Stage 1 1992 Stage 3 Now and Next Stage 2 Late 1990s • HEDIS measures • HEDIS for MDs • HMO product line • Withhold or Bonus based payouts • Hospital measures • Balanced Scorecard • Evidenced based quality • Cost measures • IT adoption measures • HMO, PPO, CDH • Tiered fee schedules • PCP, Specialist + Facility • Balanced Scorecard • Shared savings for funding • Integrate with DM • Actionable MD info - alerts, registries, reminders • All products, ASO Features • Static consumer report cards • Safety and medication errors • Provider IT investment • Collection of non-claims data (lab values, etc.) • Personal, dynamic consumer report cards • EMR Integration • Sophisticated clinical info • Point of care data integration • Demonstrable ROI • Responsible Public Reporting • Informational • Low impact on cost • Preventive care • Existing data sets Benefits Progress

9. Med Vantage Survey 2005: P4P Programs Prediction: 145-160 programs in 2006

10. 200320042005 n = 34 n = 78 n = 82 PCPs32 73 78 94% 94% 95% Specialists13 33 43 38% 42% 52% Hospitals8 17 30 24% 27% 37% Types of P4P Programs

11. 2003 Survey 2004 Survey 2005 Survey n = 34 n = 50 n = 76 Clinical 89% 94% 91% Patient Satisfaction79% 56% 37% Efficiency/Utilization57% 46% 50% IT/Infrastructure39% 54% 42% Administrative54% 40% 25% Other32% 22% 26% What is Scored? NOTE: in 2003 and 2004 both hospital and physician P4P programs were included in this question

12. Implications for Physicians

13. Maine Health Coalition

14. Implications for Consumers

15. MD and Patients with Actionable Results

16. Challenges - Complex program requirements - Complex technical requirements - Complex methodological issues Successes - Provider engagement tools - Business rules to address technical issues - Advances in measurement methodologies - Programmatic improvements Challenges Challenges and Successes Success

17. Health Plan Challenges Challenges n = 78

18. Challenges How ?Complex Program Requirements Web Access Physician, Hospital, Member Data Integration Claims, Lab Results, EMR, Health Ed, Health Risk Survey, Directory, Hospital Ratings Provider Engagement Process Feedback, Registry, On Time Reminders McKesson RDBMS Scoring, Statistical Validation, Incentive Program Cost of Care Indicators ETG Episodes, DCG, RVU, CSC, GAR Quality Indicators Evidence Based Clinical Measures, Patient Experience, Attribution, Course of Treatment Medical Claims, Rx Data

19. Complex Technical Requirements Challenges Database construction – ex. MV RDBMS Platform Built EBM measures, configurable for multiple specialties Target setting (mean, absolute, relative) using statistically sound methods EBM references (grade of evidence, citations) Patient registry, Electronic patient health record Specialty Condition efficiency indexing Non- admin data results reporting and chart results entry Statistical validity checks (sample size, confidence intervals, percentile ranking, scoring) Scoring and payment calculation Balanced scorecard construction P4P funding module Web design, electronic and non-electronic delivery Exception reporting & data correction Care alert generation (omissions/commissions, gaps, DDI checks)

20. Quality Measure Sources Challenges n = 78

21. Challenges Limited Specialty Measures

22. Reporting to Physicians Challenges

23. Reporting to Physicians(Variation, Sample size, MD input)

24. Reporting Variation

25. Complex Methodological Issues Challenges •  Tomorrow’sBenchmark 50th %ile •  Today’s Benchmark • High Quality • Low Cost • (Dream Suppliers) • High Quality • High Cost Quality Index(outcomes or % adherence to EBM) 50th %ile Lower Higher • Low Quality • High Cost • (Nightmare Suppliers) • Low Quality • Low Cost MD Longitudinal Cost Index Higher Lower (total cost per case mix-adjusted treatment episode or chronic illness yr) Source: Arnold Millstein, MD, Mercer, M. Rattray, Regence Blue Shield

26. “Health insurance program aimed at efficiency brings confusion, outrage“ By Judith Vandewater Challenges The Greatest Challenge is…. Facing the Challenge THE WALL STREET JOURNAL Tuesday, March 29, 2006 “Doctors Rap UnitedHealthcare For Its New Evaluation Program” By Sarah Rubenstein Sunday, February 13, 2005

27. Factors of Success Success n = 82

28. ACP Definition of Provider Engagement Success • Physician “co-authoring” • Data and Measures • - Physician control • - Statistical reliability, sufficient sample size, risk adjustment • - EBM based, broadly accepted, clinically relevant • - Data collection must not impose higher administrative costs • Information and Process that Fosters Improvement • - Opportunity for correction, appeal • - Detail for improvement Source: The Use of Performance Measurements to Improve Physician Quality of Care, A Position Paper, American College of Physicians, April 2004

29. Non-profit, non-aligned organization serving physicians and health plans Mission: To enhance the collective understanding of how provider incentive programs and public display of provider performance can best promote health care quality, efficiency, and safety Offers non-proprietary (no license fee) clinical IT survey tool for health plans to use with providers Engagement Tools –Health Performance Institute • Launching EBMPedia, first national consensus and physician comment tool for > 200 quality measures with cross references to national standard sets (AQA, AHRQ, ACC, etc.) .

30. Engaging Physicians: EBMPedia

31. Patient Assignment - Methods to identify responsible MD Course of Treatment - Timeframes for care, gaps in coverage Clinical Measure Rules - Composite Measures, Overall Clinical Index Cost Measure Rules - Specialty Condition Index, Goal Attainment Rate Outlier Trim Methodology Risk Adjustment Methodology Statistical Tests for Validity – - Confidence intervals, correlation tests, minimum sample size, display rate, descriptive statistics Success: Business Rules Build Reliability Success

32. Success: Business Rules for Scoring Success n = 78

33. Success Trend without shared savings (+9.1%) Z% Employers & Individuals Operating & Supply Costs Premium (5- 6%) Accrued Savings X% Trend with shared savings (1x savings, 3%) Y% Affordable Insurance Yr 3 Yr 0 Administration Premium offset Valupay Physician Action Report for Clinical Measure: Blood Pressure Efficiency Measure 1 Process Measure 1 Clinical Measure 1 Performance Criteria Measures Rules Engine Shared Savings 1 4 2 3 DSS Hospital New Ideas: Share Savings Health Plan Gain Sharing MD Practice

34. Robert Wood Johnson “Rewarding Results” Grant - 2002 to 2005 Implement and assess impact of 7 large P4P programs (MHQP, IHA, BTE, 3 BC plans, LIRR) Rand Assessment of Physician P4P Programs for Medicare Thorough study of literature and existing programs Impact: Recent “Experiments”

35. Impact:Role for Pharmacy Azithromycin First Line Antibiotics Education Profile Education Profile Greene et al “Increasing Adherence..”, Am J Manage Care 2004; 10:670-8

36. Impact: HEDIS Rate Increases * Statistically Significant

37. Actuarial Rolling Trend Analysis For Diabetes Baseline 2001/2002, Intervention 2003/2004 CAD Provided Additional $2 Million Journal of Healthcare Management Fall 2006 Impact: Return on Investment Profile ROI 20032004 Annual Savings on Trend1,894,4712,923,760 Annual Cost 1,148,5971,148,597 ROI 1.5:1 2:1

38. Changes for Success Success n = 82

39. Predictions: Key Trends Ahead in P4P Commitment to IT adoption Getting “actionable information” to physicians Public scorecards on quality, efficiency, and IT Integration of P4P and DM Growth in consumer incentives Continuing role of CMS ‘Budget neutral” P4P Continued push for standard ambulatory measures The emergence of “shared savings” models

40. When The Choices Look Like This . . ….Do This…... • Do the right thing. • It will gratify some… • and astonish the rest.” • Mark Twain

41. Kathleen Curtin 1 California Street, Suite 2800 San Francisco, CA 94111 (415) 765-7106 www.medvantage.com kcurtin@medvantage.com For More Information…