Paying for Quality Health Care: States’ Roles

1. Paying for Quality Health Care: States’ Roles CSG/ERC Value-based Purchasing Group meeting August 3, 2009 Burlington, VT Ellen Andrews, PhD www.csgeast.org

2. Overview • Health care spending • Health care quality • Problems with current payment systems • What is value-based purchasing? • Federal level – Medicare, national health reform • Paying for value/quality – why states should be engaged • Options • P4P • Data reporting, report cards • Never events • Episodes of care, bundling payments • Global capitation • Supporting options • Lessons • Next steps

3. Health care spending

4. And it’s going to get worse

5. State spending

6. State spending

7. Quality • Only 39% of American adults are confident that they can get safe, effective care when needed • Americans get only 55% of recommended care on average • Half of Americans report poor coordination of care; especially among those who see more than one doctor • One in three Americans reports getting unnecessary care or duplicate tests.

8. Quality in the region

9. Quality in the region

10. Quality in the region

11. Quality in the region

13. If it’s not broken, don’t fix itWell, it’s broken

14. Current incentives • Pay the same for unequal quality services • Consumers have no information and no incentive to choose higher quality/higher efficiency service providers • Encourages overuse, misuse of services • Higher spending not correlated with higher quality • Higher spending not correlated with better patient satisfaction

15. Fee-for-service misaligned incentives Fee for service encourages: • More services • Less coordination • Incentives for duplication • Few incentives for prevention • Stifles innovation • Only pays for selected services - not email, group visits, phone calls • No link to quality • Incentives to increase high profit services/patients and avoid low profit

16. Value-based purchasing • Rewards better outcomes • Payments based on quality and efficiency of care • Data driven • Remove incentives for more services • Flexibility for providers to customize care • Reward patient satisfaction • Remove fragmentation and conflicting incentives • Align provider, payer and consumer incentives to reward quality, effectiveness and efficiency

17. Consumers support value-based purchasing • 95% of Americans feel it is important to have information about the quality of care provided by different doctors and hospitals • 88% feel it is important that they have information about the costs of care to them before they actually get care

18. Federal VBP • Strong feature in national reform discussions – Senate Finance, HELP and House bills • Medicare • 23 programs – P4P, pay for reporting, never events, medical home, gain sharing, removing regulatory barriers, e-prescribing, data aggregation • Premiere Demonstration – hospital P4P • Implementing differential payments based on readmission rates

19. Why should states implement VBP? • State employee groups usually one of largest groups in state – 42 states self-insure • Medicaid programs – covers one in five Americans • States regulate insurers, license providers, CON • Trusted source for consumer education, data collection, research • Public health collaborations • Innovators – medical home, HIT, coverage programs • Provider training – promote primary care, emphasis on accountability, transparency • Convener – can get people to the table

20. Options: Transparency • Data reporting • Report cards – hospitals, health plans, providers • Coalitions with other payers, providers for joint reporting • All payer data aggregation • State employee, Medicaid reporting • Improve consumer access to information

21. Options: P4P • Widespread, but mixed results • Medicaid P4P in 28 states and growing • Federal Medicaid limits on incentive payments in risk-based systems • Target health plans and/or providers • Coordinate and join with other payers to make payments salient to providers • Outcomes vs. process and teaching to the test/cookbooks • Provider resistance, low Medicaid participation rates

22. Options: Payment system overhaul • Never events • Market share – tier and steer • Shared savings • Episodes of care, bundled payments • Global capitation • Resistance • Barriers

23. Supportive options • Medical home • Accountable care organizations • EMRs, health information exchange • Workforce development, esp primary care • Evidence based medicine

24. Lessons from others • Collaborate first • Go slowly • Start small and with strongest partners • Coordinate across payers -- standardize • Fair and open process • Everyone on same page, all have same understanding • Be clear on goals, single-minded dedication • Strong consumer education piece necessary • Plan for transitions • Don’t underestimate the power of disclosure and transparency, often stronger motivator than $$$ • Be brave

25. Committee options • Study • How states implementing, diversity of approaches • Track barriers, successes • Resources needed • Lessons learned • Tools • Website • Conference calls • Updates • Advocacy with federal government for resources, flexibility • State visits • Develop guiding principles