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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. Overview. Health care spending Health care quality Problems with current payment systems What is value-based purchasing?
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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
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
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.
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
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
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
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
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
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
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
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
Options: Payment system overhaul • Never events • Market share – tier and steer • Shared savings • Episodes of care, bundled payments • Global capitation • Resistance • Barriers
Supportive options • Medical home • Accountable care organizations • EMRs, health information exchange • Workforce development, esp primary care • Evidence based medicine
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
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