Pay for Performance: Have Expectations Exceeded Outcomes?

1. Pay for Performance:Have Expectations Exceeded Outcomes? A Review of National Trends and Future Directions Geof Baker, Principal Venture Advisory Services

2. National Context • Lessons Learned • Release 3.0 Agenda National Context 2

3. P4P Market Adoption Has Matured Growth in P4P Programs by Sponsor Type (2003 -2009E) Source: Med-Vantage-Leapfrog 2006 National Survey with 2007 Market Updates Note: For “Other” in 2007, included disease management programs and vendors with P4P incentives under the primary program sponsor (Medicaid) and 10 projected implementations .

4. P4P Incentives Extend to All Providers Source: Med-Vantage-Leapfrog 2006 National Survey with 2007 Market Updates

5. 1st Generation (1996-2004) 2nd Generation (2005-2007) 3rd Generation (2008-2010) The P4P Evolution Roadmap

6. 1st Generation (1996-2004) 2nd Generation (2005-2007) 3rd Generation (2008-2010) The P4P Evolution Roadmap

7. P4P Complements Other Initiatives Standards Interoperability Data Aggregation Public Reporting Transparency Recognition Pay-for-Reporting Pay-for-Process - Data Quality Payment reform Value Based Benefit Design Pay for Performance • HIT Adoption • HIE, Erx, EHR Integrated Care Management Medical Home Provider Engagement Best Practices Tiered Networks

8. Reasons for Implementing P4P Programs Using a scale from 1-5, where 1 equals NOT important and 5 equals VERY important Source: 2007 Med-Vantage/Leapfrog P4P Survey

9. National Context • Lessons Learned • Release 3.0 Findings & Lessons Learned

10. Inherent Limitations ….But Here to Stay Rewards Integrated with Other Initiatives Insufficient Motivation P4P payments > 10%, frequency to reinforce change All payer & aggregated data, uniform platforms with regional exchanges to increase sample size Diminishing Returns • Band-Aid • Critical Mass • Gaming Outcomes/composite measures, opportunity areas, CQI culture, engage MDs, assisted interventions Exception reporting, risk adjustment Some +gains, few wind-ups, requires iterations & reengineering, cost of care/outcome measures • ROI Unknown

11. Many Use P4P as a Strategy to Achieve Change

12. Inherent Limitations ….But Here to Stay Uniform measure sets, coordinated programs, HIT Relative improvement payout models Health Disparities • Bias • Latency • Burdensome Demographic adjustment required • Patient Accountability Value based benefit design, patient health rewards Quarterly reporting, point-of-care interventions • Single Source of Truth Data integrity, patient attribution, standards, clinical data exchanges, direct data submission, chart data

13. Direct data submission (supplement claims with collection of clinical values from registries or EHRs, lab) Multiple submission methods (secure sign-on, electronic) Standardized data field definitions All payer aggregation of admin data (claims, rx) Immediate validation / integrity checks Auditing and QA (correct coding) Help desk and training support, Models: IHA, MHQP, BTE, MN, BQI / Charter Value Exchange Multiple attribution models - what are the intended purposes? Data Submission & Integrity

14. National Context • Lessons Learned • Release 3.0 Next Generation Release 3.0

15. Anticipated Changes in P4P Programs Data Aggregation – Participation in state-wide, collaborative quality initiatives Source: Med-Vantage-Leapfrog, 2006 National Survey with 2007 Market Updates

16. Road Ahead: Key Trends for P4P CMS is now in business, More $ to incent sustained change Strategy to achieve change and sustain CQI Going beyond process measures with diminishing returns - Clinical measure impact must be demonstrable and focused Integration with other initiatives - HIT adoption (ERx), Medical Home, Cost of Care (Are we reducing trends yet?), Health Rewards Methodology: full disclosure & open standards (nyrxreport.ncqa.org) Physicians acting upon “actionable information” at point-of-care Data aggregation, clinical exchange, clinical values, enhanced collection Strong push for transparency