Pay-for-Performance and IT s Impact

1. Pay-for-Performance and IT�s Impact 5th Annual Health Information Technology May 17, 2006 kathleen.kimmel@mckesson.com

2. What are we going to cover? What is Pay for Performance (P4P)? Why is P4P being considered now? What types of P4P programs exist? What are the problems with P4P? P4P Survival Strategies for you and your organization What is the future of P4P and what it means to you?

3. The goal of P4P is to align payment (and incentives) with quality �The current payment system, not only doesn�t reward quality, it is actually toxic and rewards bad quality.� Peter Lee, CEO Pacific Business Group, �Fast Track to Rewards,� Healthcare Informatics, v22/3, 26-30, 2005

4. In healthcare policy we need to understand the incentives we create What incentives were created for hospitals when DRGs emerged? What incentives were established for private practice physicians with managed care capitation and at-risk payment models? What type of incentives did DRGs create? What type of incentives did managed care capitated models create? What incentives did restrictive insurance coverage create? �The idea that physicians don�t respond to incentives is ludicrous. Doctors react to pens, pizza, and free pills...� Michael Hillman, MD, Marshfield Clinic, Wisc. Modern Healthcare Oct. 31, 2005 What type of incentives did DRGs create? What type of incentives did managed care capitated models create? What incentives did restrictive insurance coverage create? �The idea that physicians don�t respond to incentives is ludicrous. Doctors react to pens, pizza, and free pills...� Michael Hillman, MD, Marshfield Clinic, Wisc. Modern Healthcare Oct. 31, 2005

5. Do incentives drive physician behavior? The American College of Physician Executives Survey percent of physician leaders who are concerned about these practices 80% -physicians refusing to be on call for pts without insurance 79% - physicians being influenced by medical device companies to perform procedures 78% - physicians over treating to boost their income 76% - physicians being influenced by pharmaceutical companies to prescribe certain drugs 63% - physicians being paid to make promotional pitches for vendors 54% - physicians inappropriately admitting patients to the hospital 54% - physicians discharging patients from the hospital too quickly to avoid length of stay outliers 51% - physicians under treating patients to keep costs down and protect bonuses Modern Healthcare March 7, 2005 Call your attention to the last two.Call your attention to the last two.

6. What happens when you provide an economic incentive to control access to reduce healthcare expenditures? Some physicians don�t tell patients about their care options 33% of physicians declined to offer "useful" medical services to some patients because the services weren't covered under their patients' health insurance. Health Affairs, July 2003

7. Patients do not receive the treatment they need � under treatment System still 'routinely' falls short on care: Between 42,000 and 79,400 Americans die unnecessarily annually because they receive less than optimal healthcare. The "routine failure to provide needed care" results in: $1.8 billion in excess medical costs and nearly 66.5 million potential sick days, including days in which sick employees work but below normal capacity. National Committee for Quality Assurance's 8th Annual State of Health Care Quality Report September 2004 Of the 16 million �underinsured� � 32% deferred medical attention, even when they had a problem because of cost Schoen et al. Health Affairs, June 14, 2005

8. The only workable approach is a clinical focus -- with a focus on: Both patient and aggregate clinical data collection Efficacious care � optimizing quality and cost --not under treating or over treating Outcomes (associated with cost � merging clinical and financial data) Achieving practice standards that are evidence and research based Following and tracking chronic disease management/case management Prevention and predictive modeling for pre-chronic diseases Patient ownership with the Physician as consultant versus advisor or owner 99% of health plans employ some sort of case mgmt or disease management, now plans are becoming far more interested in predictive modeling. Aggregate level data that can be used to plot disease progression from pre-chronic to chronic and intervene.99% of health plans employ some sort of case mgmt or disease management, now plans are becoming far more interested in predictive modeling. Aggregate level data that can be used to plot disease progression from pre-chronic to chronic and intervene.

9. Costs of Errors and Variation

10. P4P Driver: Payers have zeroed in on how much could be saved by reducing errors Medical errors are responsible for 30% of the price of healthcare More than 50% of the $17- $29 billion national cost associated with medical errors is preventable Medical errors cost 10-15% of a hospital�s annual operating budget Task Force on Healthcare Cost Control, March 2002 ADEs are responsible for $2 billion per year nationwide in hospital costs alone Bates DW, et al. JAMA. 1997;277(4):307-11 One ADE adds more than $2,000 on average to the costs of hospitalization Classen DC, et al. JAMA. 1997;277:301-306

11. Dartmouth Study � highlights variances and finds that more care is not better The Dartmouth Study � Wennberg et al � 90,616 Medicare patients treated for Cancer, CHF, COPD at 77 of the top US hospitals � Patients with large amounts of care did no better than those with less care. Extra Dr. visits, longer hospital stays, more tests and more consults appear to have hastened death Journal of Health Affairs October 2004

12. The CA study shows $1.7 billion wasted due to variability in care When more care was provided, quality & patient satisfaction declined CMS paid some hospitals 4x more than others for patients with similar chronic illnesses, with no improvement in quality, satisfaction and outcomes J. Wennberg et al, Dartmouth study Health Affairs Web edition November 2005 The study looked at patients in California�Sacramento, San Francisco, Los Angeles, Orange County, and San Diego for 5 years. Figure 1), hospitals in Los Angeles received an average of 60 percent more for inpatient reimbursement for Medicare patients during the last two years of life than Sacramento-area hospitals. In fact, Medicare paid some hospitals in the state as much as four times more than other hospitals to care for patients with similar conditions. services were driven not by patient need, but by the supply of medical resources. In regions that have more hospitals, more ICU beds, more physicians, and more specialists, patients receive significantly more services at greater cost, but with no improvement in outcomes. The study looked at patients in California�Sacramento, San Francisco, Los Angeles, Orange County, and San Diego for 5 years. Figure 1), hospitals in Los Angeles received an average of 60 percent more for inpatient reimbursement for Medicare patients during the last two years of life than Sacramento-area hospitals. In fact, Medicare paid some hospitals in the state as much as four times more than other hospitals to care for patients with similar conditions. services were driven not by patient need, but by the supply of medical resources. In regions that have more hospitals, more ICU beds, more physicians, and more specialists, patients receive significantly more services at greater cost, but with no improvement in outcomes.

13. Variability in hospitals is also a patient safety issue HealthGrades studied over 5,000 U.S. hospitals (39 million patients) �If all hospitals performed as well as their highest rated counterparts, more than 153,000 lives could have been saved & 22,000 post-op complications avoided.� Healthgrades.com February 2006 HealthGrades used the MedPAR data. Acute care hospitals were studied. Included 26 diagnoses �risk adjusted for age, sex, smoking habits and obesity. The top 5% of hospitals has 27% lower risk of mortality for 17 of the 26 procedures. They also had a 14% lower risk of post-op complications. HealthGrades used the MedPAR data. Acute care hospitals were studied. Included 26 diagnoses �risk adjusted for age, sex, smoking habits and obesity. The top 5% of hospitals has 27% lower risk of mortality for 17 of the 26 procedures. They also had a 14% lower risk of post-op complications.

14. Variability in costs and quality are pervasive In a study of 29 surgeons at a Midwestern Academic Med Center Costs for the same surgery varied widely � as much as 45% Outcomes for the most expensive surgeons did not correlate with better quality Journal of the American College of Surgeons, April 2006 University of Michigan involved 785 patients between 2003 and 2004. Costs were adjusted for patient mix and complexity of the procedures.University of Michigan involved 785 patients between 2003 and 2004. Costs were adjusted for patient mix and complexity of the procedures.

15. And it is not just variances� basic care is often not up to quality standards Adherence to quality indicators � by condition Receiving Poor-Quality Health Care?Asch S. M., Kerr E. A., Keesey J., Adams J. L., Setodji C. M., Malik S., McGlynn E. A. Abstract | FREE Full Text | PDF N Engl J Med 2006; 354:1147-1156, Mar 16, 2006. Special Articles The RAND researchers found that overall 54.9% received recommended care with women scoring slightly higher than men (56.6% vs 52.3%).Receiving Poor-Quality Health Care?Asch S. M., Kerr E. A., Keesey J., Adams J. L., Setodji C. M., Malik S., McGlynn E. A. Abstract | FREE Full Text | PDF N Engl J Med 2006; 354:1147-1156, Mar 16, 2006. Special Articles The RAND researchers found that overall 54.9% received recommended care with women scoring slightly higher than men (56.6% vs 52.3%).

16. Consumers often do not know what care they should receive Elderly patients often reported a high degree of satisfaction with their medical care, although they received suboptimal care almost half the time, according to a report being published Tuesday in the Annals of Internal Medicine. The results raise concerns about the tendency to treat patient satisfaction scores as a substitute for quality-of-care measures, the researchers said. In 1998 and 1999, the researchers interviewed 236 elderly patients, mostly white women, with an average age of 80, about their medical experience. The researchers subsequently compared the patients' responses to their medical records. Patients rated their satisfaction with their medical care an average of 8.9 on a 10-point scale. A review of medical records, however, indicated that the patients received the recommended care only 55% of the time. The researchers concluded that patient satisfaction ratings do not reflect the actual quality of care delivered and should not be used as a marker for technical quality. The study was funded by Pfizer and conducted by researchers from RAND Health, University of California-Los Angeles and the Veterans Affairs Department Elderly patients often reported a high degree of satisfaction with their medical care, although they received suboptimal care almost half the time, according to a report being published Tuesday in the Annals of Internal Medicine. The results raise concerns about the tendency to treat patient satisfaction scores as a substitute for quality-of-care measures, the researchers said. In 1998 and 1999, the researchers interviewed 236 elderly patients, mostly white women, with an average age of 80, about their medical experience. The researchers subsequently compared the patients' responses to their medical records. Patients rated their satisfaction with their medical care an average of 8.9 on a 10-point scale. A review of medical records, however, indicated that the patients received the recommended care only 55% of the time. The researchers concluded that patient satisfaction ratings do not reflect the actual quality of care delivered and should not be used as a marker for technical quality. The study was funded by Pfizer and conducted by researchers from RAND Health, University of California-Los Angeles and the Veterans Affairs Department

17. Premium costs concern employers � rampant inefficiencies that do not reward quality are driving premium costs too high for minimum wages! Heath Research and Educational Trust Average annual premiums for family coverage in HMO plans is $8,314 and PP0 is $9,317Heath Research and Educational Trust Average annual premiums for family coverage in HMO plans is $8,314 and PP0 is $9,317

18. Care adhered to recommended quality indicators only 55% of the time! Adherence to Quality Indicators, According to Mode It is interesting to note that a JAMA study (293:565-571, 2005) showed that in 32 primary care clinics in Colorado studying 253 practioners there was missing information (lab 6.1%, letters/dication 5.4%, radiology results 3.8%, H&P 3.7%, medications 3.2%) Missing information somewhat likely to impact the patient 44%, Likely to delay care or result in additional services 60%. It is interesting to note that a JAMA study (293:565-571, 2005) showed that in 32 primary care clinics in Colorado studying 253 practioners there was missing information (lab 6.1%, letters/dication 5.4%, radiology results 3.8%, H&P 3.7%, medications 3.2%) Missing information somewhat likely to impact the patient 44%, Likely to delay care or result in additional services 60%.

19. If the population is not getting proper care who pays the bill down the road? CMS says government will pay half of health care costs by 2014 CMS says government will pay half of health care costs by 2014

20. Med-Vantage estimates there are 115 P4P programs in the U.S. Modern Healthcare February 13, 2006

21. P4P programs fall in to 2 categories �apply to hospitals & physicians Cost Differential Programs & Quality-tied Networks- plans offer patients reduced co-pays or deductibles for visits to high quality physicians & hospitals Direct Reimbursement Programs payments and bonuses to providers for meeting sets of clinical, administrative, and IT standards hospitals typically receive enhanced per case payments Shared Withholds (at Risk) � portions of reimbursement are withheld until a provider meets IT implementation targets or quality goals through the use of technology -providers not meeting targets lose the % at risk Payment Reductions/Denials hospitals that did not submit CMS performance data received 0.4% less payments in 2005 Tufts Health Plan withheld bonuses of 3000+ physicians due to low pt. satisfaction scores New York Times Nov. 30, 05 Denial of Payment for errors (Health Partners) Legal Remedies � Federal False Claims Act � fines for care related errors We have broken p4p into 2 broad categories, incentives and punishments. The incentives are represented by the carrots and the punishment by the sticks.We have broken p4p into 2 broad categories, incentives and punishments. The incentives are represented by the carrots and the punishment by the sticks.

22. P4P Facts  more widespread & more $$ incentives Physicians - Began with emphasis on PCPs (in large practices in key markets) 52% of programs now include specialists 88% of programs are the bonus variety Used to be small bonuses � 1.5% Now moving higher Integrated Healthcare Assoc has bonuses of up to 10% LA Times Feb. 6, 2006 BCBS MA $2/ppm x 800 pts =$20,000 Harvard Pilgrim $3.70 pmpm =$37,000 Hospital programs are on the rise Now 37% of total P4P programs Started with a few core measures, will grow! The figures used in the calculations are for a 5-physician practice with 800pts. PCP=primary care physicians. The important point to make is that in the past, the financial incentives were almost inconsequential . Now that they getting to the point that they are worthy of attention.The figures used in the calculations are for a 5-physician practice with 800pts. PCP=primary care physicians. The important point to make is that in the past, the financial incentives were almost inconsequential . Now that they getting to the point that they are worthy of attention.

23. What is the BIGGEST health plan doing? Focusing on Physician and Hospitals CMS press release October 28, 2005 HCAPS was tested in 3 states --- AZ, MD, and NY 4/25/05 only 60 out of close to 5000 hospitals did not �voluntarily� report on quality CMS reported.HCAPS was tested in 3 states --- AZ, MD, and NY 4/25/05 only 60 out of close to 5000 hospitals did not �voluntarily� report on quality CMS reported.

24. Physician demonstrations... Management Performance Demonstration 3 yr project with physicians chronically ill Medicare patients targets small & medium-sized practices 4 states (AR,CA, MA, UT) bonuses for meeting or exceeding

25. CMS & AHRQ have formed a broad alliance looking at physician care Ambulatory Care Quality Alliance 125 Members from public and private insurance plans Provide a national framework for performance measures and reporting Reward physicians who provide high quality care Pilot Data collection begins May 1, 2006 for 6 groups 1. California Cooperative Healthcare Reporting Initiative 2. Indiana Health Information Exchange 3. Massachusetts Health Quality Partners 4. Minnesota Community Measurement 5. Phoenix Regional Value Measurement Initiative 6. Wisconsin Collaborative for Healthcare Quality Modern Healthcare March 1, 2006

26. CMS is now focusing on integrated delivery systems & physicians The Medicare Health Care Quality Demonstration project A 5-year plan 12 selected providers Begins late 2006 Payments tied to cost savings & improvements Offers freedom to find new, innovative ways to improve patient safety, quality & efficiency while reducing fragmentation and variations in medical practices Modern Healthcare, October 31, 2005

27. CMS is also focusing on Hospitals Hospital Quality Initiative [formerly the National Voluntary Hospital Reporting Initiative (NVHRI)] is growing from 10 to 34 quality measures Section 501(b) of the Medicare Prescription Drug Improvement and Modernization Act of 2003 � non submitting hospitals 0.4% lower annual payment 98.3% of hospitals participated in 2005 CMS is focusing on hospitals. They started off with a voluntary reporting initiative. Guess what happens when you start with a voluntary initiative. That�s right, chances it will only be voluntary for a short period. This is the case with CMS, reporting is no longer voluntary and the # of measures is increasing.CMS is focusing on hospitals. They started off with a voluntary reporting initiative. Guess what happens when you start with a voluntary initiative. That�s right, chances it will only be voluntary for a short period. This is the case with CMS, reporting is no longer voluntary and the # of measures is increasing.

28. CMS & Premier are working together The Premier Hospital Quality Incentive Demonstration Began October 2003. Objective to demonstrate a new performance based payment system. 278 organizations participating 34 Measures/5 Clinical Areas 1) CABG; 2) AMI; 3) Heart failure; 4) Hip & Knee replacement; 5) Pneumonia Bonuses and Penalties � Bonuses to hospitals ($21 million over 3 years) Top 10% Hospitals receive 2% bonus 2nd 10% Tier Hospitals receive 1% bonus Bottom 10% cut in Medicare payments by 2% (to begin in year 3) 2nd closest to the bottom decline in payments by 1% (year 3) http://www.premierinc.com/all/newsroom/press-releases/05-may/ - Dubbed �Tournament Style� - Dubbed �Tournament Style�

29. Results are in on the CMS/Premier Hospital Quality Incentive Demonstration CMS wrote checks for $8.85 million to 123-top performing hospitals Acute myocardial infarction quality score improved from 89.9 to 92.6% Coronary artery bypass graft improved from 85.7% to 90% Heart failure improved from 64.1% to 76.2% Hip and knee replacement improved from 84.9% to 90.5% Pneumonia improved from 70% to 80% Modern Healthcare, April 14, 2006

30. Health Plan and Hospital report cards are now available to patients The cms website, hospital Compare provides information on 17 widely accepted quality measures for treating heart attack, heart failure and pneumonia. All but 60 of the 4,200 US hospitals are voluntarily providing data. Hospitals in Mich., Connecticut, and Rhode Island are participating in the field test. HCAPS asks 27 questions to measure pt satisfaction (the earlier version contained 68 questions) Hospitals &Health Networks Oct. 05 Keep in mind that reports are not always accurate, which can lead to grade inflation.The cms website, hospital Compare provides information on 17 widely accepted quality measures for treating heart attack, heart failure and pneumonia. All but 60 of the 4,200 US hospitals are voluntarily providing data. Hospitals in Mich., Connecticut, and Rhode Island are participating in the field test. HCAPS asks 27 questions to measure pt satisfaction (the earlier version contained 68 questions) Hospitals &Health Networks Oct. 05 Keep in mind that reports are not always accurate, which can lead to grade inflation.

31. Why is CMS singling out certain areas to concentrate on for P4P? A small number of illnesses -- many preventable -- account for most of the spending increase. Emory University health economist, 15 of 370 conditions accounted for 56% of the $200 billion rise in health spending between 1987 and 2000. Five conditions accounted for 1/3 of the increase, with heart disease topping the list, followed by pulmonary conditions, mental disorders, cancer and hypertension. Health Affairs. (Aug. 25, 2004) This is the work of Emory University�s health economist Kenneth ThorpeThis is the work of Emory University�s health economist Kenneth Thorpe

32. Medical errors could be a violation of the Federal False Claims Act if CMS is charged for error-related services False Claims Act (the Lincoln Law) � enacted in 1863 Updated in 1986, includes: Whistleblower Awards of 15-20% of the settlement Treble damages plus $5,000 - $10,000 per claim Hourly court/prosecution fees Could be used when: Errors stem from staff shortages Unnecessary or incorrectly performed procedures Failure to provide appropriate care Errors due to not following proper procedures Hospital in PA fined $200K 7.25.2005 � restraint doc. violations Medical University in New Jersey fined $4.9 million 6.21.2005 - research grant fraud, Hospital in California fined $54 million 8.2003 � unnecessary surgery Chuck Grassley - Senate (R-Iowa) introduced legislation to the Senate Judiciary Committee that would required the Justice Department to report False claims act settlements to Congress on a semiannual basis. Weill Medical College of Cornell University agreed to pay $4.4 million to settle False Claims Act allegations relating to research grant fraud. June 21, 2005The government alleged that Weill improperly reported and accounted for spending on a series of grants from the National Institutes of Health to support its Pediatric General Clinical Research Center at affiliate New York Presbyterian Hospital. Weill allegedly violated the so-called "33% rule," which prohibits any one researcher from garnering more than a third of an NIH grant, allowing "one researcher to . . . in effect dominate the research at the (PGCRC) at the expense of the government." The suit, brought by a whistle-blower, also alleges the program double-billed Medicaid for some services, charged grants for the full salaries of some staff who didn't work on the programs full time and charged salaries for nurses who didn't work for the program Profiteering examples during civil war who shipped boxes of sawdust and billed for boxes of guns or resold the same cavalry horses several times. Central Montgomery hospital in Lansdale, PA, owned by Universal Health Services will pay $200,000 to settle claims that involved the alleged illegal use of physical and chemical restraints. Violations occurred in a 10-month period in 2002. A State survey found that 91 out of 91cases the hospital did not adequately dcoumment that it complied with the Medicare Policy on restraints or skipped required steps. Tenet hospital in Redding California The president of the University of Medicine and Dentistry of New Jersey has agreed to step down on Feb. 28. John Petillo The school last year averted criminal prosecution for healthcare fraud by agreeing to a series of financial, management and personnel reforms and to reimburse the state and federal governments a total of $4.9 million. -- by Cinda BeckerChuck Grassley - Senate (R-Iowa) introduced legislation to the Senate Judiciary Committee that would required the Justice Department to report False claims act settlements to Congress on a semiannual basis. Weill Medical College of Cornell University agreed to pay $4.4 million to settle False Claims Act allegations relating to research grant fraud. June 21, 2005The government alleged that Weill improperly reported and accounted for spending on a series of grants from the National Institutes of Health to support its Pediatric General Clinical Research Center at affiliate New York Presbyterian Hospital. Weill allegedly violated the so-called "33% rule," which prohibits any one researcher from garnering more than a third of an NIH grant, allowing "one researcher to . . . in effect dominate the research at the (PGCRC) at the expense of the government." The suit, brought by a whistle-blower, also alleges the program double-billed Medicaid for some services, charged grants for the full salaries of some staff who didn't work on the programs full time and charged salaries for nurses who didn't work for the program Profiteering examples during civil war who shipped boxes of sawdust and billed for boxes of guns or resold the same cavalry horses several times. Central Montgomery hospital in Lansdale, PA, owned by Universal Health Services will pay $200,000 to settle claims that involved the alleged illegal use of physical and chemical restraints. Violations occurred in a 10-month period in 2002. A State survey found that 91 out of 91cases the hospital did not adequately dcoumment that it complied with the Medicare Policy on restraints or skipped required steps. Tenet hospital in Redding California The president of the University of Medicine and Dentistry of New Jersey has agreed to step down on Feb. 28. John Petillo The school last year averted criminal prosecution for healthcare fraud by agreeing to a series of financial, management and personnel reforms and to reimburse the state and federal governments a total of $4.9 million. -- by Cinda Becker

33. What is the Private Sector Doing?

34. Some examples of P4P Integrated Healthcare Association � (7 CA health plans --Aetna, BC of California, Blue Shield of CA, CIGNA CA, Health Net, PacifiCare & Western Health Advantage) requires 3.25 patient visits per provider/year for 2005/2006 (2.7 in 2004). Pays up to $150 million per year to physicians for documented performance: Treatment of chronic conditions Childhood immunization Cancer screening rates Use of information systems Patient satisfaction scores June 2005 www.iha.org This is the 1st plan in the country that has set a requirement for patient visits per provider per year. The goal is to catch pre-chronic conditions.This is the 1st plan in the country that has set a requirement for patient visits per provider per year. The goal is to catch pre-chronic conditions.

35. P4P Continued Bridges to Excellence Diabetes Care Link -- Annual bonuses of $80 per patient if they adhere to the American Diabetes Association quality care standards: (Studies show 70% of diabetics do not receive care meeting the ADA standards.) The estimated savings is $350 annually per diabetic patient) Blood sugar tests, Retinal exams, Kidney function tests, Cardiac Care Link - $ 50 per patient Physician Office Link -- $160 per patient http://www.bridgestoexcellence.org Medical groups demonstrated they monitor patients' medical histories; work with patients over time, not just during office visits; follow up with patients and their providers; manage populations, not just individuals; use evidence-based care; avoid medical errors; and encourage better health habits and self-management This was the first round of awards under the Physician Office Link program. The money came from Boston-area employers General Electric Co., Ford Motor Co. Proctor & Gamble Co., Raytheon Co., Verizon Communications and United Parcel Service. Rewards were based on the number of employees that medical groups treated. Results Independent studies done by 3 national health plans found that care was substantially more consistent with best practice guidelines. Physicians delivered care at a 10% to 15% lower cost -- savings came from fewer hospitalizations and fewer patient visits to the emergency room March 28, 2005 http://www.bridgestoexcellence.org Care First BlucCross Blue shield joined P4P last month and announced it would pay doctors as much as $20K to install electronic patine trecord systems as part of the health plan�s bonus plan. This new initiative involves 10 states and more than 2 million people. Original Markets were MA; Louisville, KY; Cincinnati, and Albany BTE is now licensing to United HC for pilots in specific states and Care First BCBS (march 05)

36. B to E is growing Comprehensive Care Practice Improvement Module � partnership with the American Board of Internal Medicine includes up to 180,000 physicians eligible for bonus payments continuing education credits Modern Healthcare February 6, 2006 Bridges to be managed by the eHealth Initiative Modern Healthcare April 6, 2006 Bto E now has some substantial backing with the Am Bd of IM. Also eHealth Initiatives , Janet Marhibroda�s group will serve as the management arm.Bto E now has some substantial backing with the Am Bd of IM. Also eHealth Initiatives , Janet Marhibroda�s group will serve as the management arm.

37. P4P continued� The Leapfrog Rewards Program - uses quality measures endorsed by the National Quality Forum and are currently collected through the Joint Commission on the Accreditation of Healthcare Organizations (JCAHO) ORYX initiative and the Leapfrog Hospital Quality and Safety Survey. 5 clinical areas: Coronary artery bypass graft (CABG) Percutaneous coronary intervention, Acute myocardial infarction, Community-acquired pneumonia: and Deliveries/newborn care Hospitals will be scored and rewarded separately for each of the five areas.� Hospitals are eligible for financial rewards if they demonstrate sustained excellence or improvement http://www.leapfroggroup.org/news/leapfrog_news/2005

38. P4P examples continued� BCBS of Illinois and Advocate Health Care � Pays Advocate for meeting specific performance goals. The deal helps Advocate pay for a new $10 million ICU 24-hour monitoring audio-video technology. Hospital mortality for ICU patients was lower (9.4% vs. 12.9%) ICU length of stay was shorter (3.63 days versus 4.35 days) Lower variable costs per case and Higher hospital revenues (from increased case volumes) generated financial benefits in excess of program costs. Critical Care Medicine. 32(1):31-38, January 2004

39. Payers may help pay for technology! Healthcare Reimbursement Fund � 2 NY Hospital Associations with 57 hospitals proposed legislation to extract $67 million a yr for 4 yrs for hospitals to pay for technology March 2006 http://www.nshc.org/upload/WHITE%20PAPER�%203.7.06.pdf is the White paper �Need to Rebalance market Forces in for New York� HMO profits were $1 billion The 2 assocs are the Nassau-Suffolk Hospital Council and the Northern Metropolitan Hospital Association. Hospitals cannot afford to invest in IT because of low reimbursent rates from the payers. On April 18, the WSJ selected William McGuire, CEO of UnitedHealth as its poster child for greedy corporate officers. Although his take home compensation is a mere $124.8 million, his option package is $1 billion!http://www.nshc.org/upload/WHITE%20PAPER�%203.7.06.pdf is the White paper �Need to Rebalance market Forces in for New York� HMO profits were $1 billion The 2 assocs are the Nassau-Suffolk Hospital Council and the Northern Metropolitan Hospital Association. Hospitals cannot afford to invest in IT because of low reimbursent rates from the payers. On April 18, the WSJ selected William McGuire, CEO of UnitedHealth as its poster child for greedy corporate officers. Although his take home compensation is a mere $124.8 million, his option package is $1 billion!

40. Now a Minnesota payer is not paying for medical errors HealthPartners, (Minnesota health plan) is the first to penalize for errors � Beginning January 2005 they no longer pay for errors: Criteria is based on a list of "nevers" -- such as surgery performed on the wrong body part or on the wrong patient, and leaving a foreign object in a patient after surgery. Modern Healthcare October 06, 2004

41. P4P Survival Strategies for you and your organization

42. P4P Reality...waking the sleeping giant!

43. The Cost of Compliance Broad market view Average hospital spends $250-500K annually on data collection alone (manual chart review to meet minimum standards) Case example of total expenditure 383-bed community hospital in IL Estimated $2.5 million invested annually to collect & report quality data 10-20 FTEs gathering data & producing reports 1,500 charts manually reviewed each month Let�s look at the rationale for hospitals to invest in IT systems to help with the growing burden of compliance: In terms of a broad industry average, hospitals spend an estimated $250-500K annually on pure data collection � this means manually reviewing charts and extracting data � and it does NOT include the cost of data aggregation, statistical analysis, report production & distribution, or any interventions to actually change practice. Looking at a specific example from one of our customers� Let�s look at the rationale for hospitals to invest in IT systems to help with the growing burden of compliance: In terms of a broad industry average, hospitals spend an estimated $250-500K annually on pure data collection � this means manually reviewing charts and extracting data � and it does NOT include the cost of data aggregation, statistical analysis, report production & distribution, or any interventions to actually change practice. Looking at a specific example from one of our customers�

44. Clinical IT now has a dual view of patient care Both business and clinical processes Materials and supply dataBoth business and clinical processes Materials and supply data

45. P4P will be the Norm for Healthcare Delivery in the U.S. HIMSS Vantage Point Survey December 2004 Number of Respondents = 312

46. Data collection and measurement present some challenges Over 400 publicly defined indicators based on clinical evidence and industry recognized metrics Process measures (~90%) Right treatment or drug at the right time Appropriate patient assessment, follow up, education, etc. Outcomes measures Mortality Post operative complications Readmissions

47. JCAHO 2005 Measure Sets Core Measures (Oryx): Acute Myocardial Infarction (AMI) Heart Failure (HF) Community Acquired Pneumonia (CAP) Pregnancy and Related Conditions (PR) Surgical Infection Prevention (SIP) report on 2 out of the 5report on 2 out of the 5

48. An example of the data collection and management challenge Reporting Virtually all of the study populations are defined by using extensive inclusion/exclusion criteria requiring a combination of clinical, demographic, diagnosis, and procedure data Numerator Statement: AMI patients whose time from hospital arrival to thrombolysis is 30 minutes or less. Data Elements: Arrival Date Arrival Time Thrombolytic Administration Date Thrombolytic Administration Time Denominator Statement: Included Populations - Discharges with: An ICD-9-CM Principal Diagnosis Code for AMI as defined in Appendix A, Table 1.1 AND ST segment elevation or LBBB on the ECG performed closest to hospital arrival AND Thrombolytic therapy within 6 hours after hospital arrival Excluded Populations: Patients less than 18 years of age Patients received in transfer from another hospital including another emergency department Data Elements: Admission Date Admission Source Birthdate ICD-9-CM Principal Diagnosis Code Initial ECG Interpretation Thrombolytic Administration Transfer From Another ED Risk Adjustment: No

49. Acute Myocardial Infarction (AMI) ASA within 24hrs. of admission ASA on D/C ACEI for LVSD Adult smoking cessation instructions Beta Blocker ordered at D/C Beta Blocker within 14 hrs. of admission Time to Thrombolysis (30 min.) Time to PTCA (120min.) Inpatient mortality Consider the reporting that you do for JCAHO and CMS. One of those measures sets is Acute Myocardial Infarction�heart attack. There are nine indicators in this set. Note that 3 of the indicators (in blue) can be captured with administrative data�diagnosis and charge code. The green items�drugs ordered on discharge are somewhat equivocal. Accurate data collection would require data elements from the discharge instructions�tough data to capture other than manually�some entities will use a charge code for a drug on the last day of the stay as a proxy. In that instance, HPM could do the same thing. The items in red, however, are time stamped clinical activities and must be captured from non-traditional data sources�and are usually collected manually. It takes about 20 minutes per chart to manually collect this data. Multiply that times your volume and the average hourly wage of your nursing staff�it is very expensive. You are spending dollars to collect data that is available electronically. By integrating clinical data into HPM, you will virtually eliminate this collection task. And what about analysis and reporting? Well HPM�s event technology can easily determine your rate of compliance with these standards of care, duration and sequence of events related to care. This is optimization of tools�new data, new technology, improved processes. Lvsd=left ventricular systolic dysfunction 183 questions in all Consider the reporting that you do for JCAHO and CMS. One of those measures sets is Acute Myocardial Infarction�heart attack. There are nine indicators in this set. Note that 3 of the indicators (in blue) can be captured with administrative data�diagnosis and charge code. The green items�drugs ordered on discharge are somewhat equivocal. Accurate data collection would require data elements from the discharge instructions�tough data to capture other than manually�some entities will use a charge code for a drug on the last day of the stay as a proxy. In that instance, HPM could do the same thing. The items in red, however, are time stamped clinical activities and must be captured from non-traditional data sources�and are usually collected manually. It takes about 20 minutes per chart to manually collect this data. Multiply that times your volume and the average hourly wage of your nursing staff�it is very expensive. You are spending dollars to collect data that is available electronically. By integrating clinical data into HPM, you will virtually eliminate this collection task. And what about analysis and reporting? Well HPM�s event technology can easily determine your rate of compliance with these standards of care, duration and sequence of events related to care. This is optimization of tools�new data, new technology, improved processes. Lvsd=left ventricular systolic dysfunction 183 questions in all

50. Pay for Performance Backlash

51. There are different ways to interpret the data! Variable definitions Not all agencies and initiatives agree on the definition of a measure This creates varying results and confusion Texas Health Care information council (THCIC)Texas Health Care information council (THCIC)

52. The American Public doesn�t get it� Consumers want quality without paying bonuses Reasons why consumers do not support pay for performance -- Consumers believe: Physicians already make enough money; and Physicians are bound by their oath to deliver the best quality care regardless of any cash bonus American Healthways Study - November 11, 2004

53. P4P is changing physicians� choice of patients NY Doctors say Report Cards Sway their Decision to Operate79% said that the knowledge that mortality statistics would be made public had, at times, influenced their decision on whether to operate Cardiologists in New York say they may not operate on patients who might benefit from coronary angioplasty because they are worried about hurting their rankings on physician scorecards issued by the state. Survey, sponsored by the School of Medicine and Dentistry at the University of Rochester, New York Times January 11, 2005 Solucient study reported in Modern HC July 12, 2005 . Unadjusted angioplasty mortality was twice as high at general hospitals and patients stayed significantly longer for both procedures, according to an analysis drawing from a database on more than 17 million U.S. discharges annually.The difference between adjusted and unadjusted outcomes "strongly implies that specialty hospitals are treating severely ill patients," Solucient study reported in Modern HC July 12, 2005 . Unadjusted angioplasty mortality was twice as high at general hospitals and patients stayed significantly longer for both procedures, according to an analysis drawing from a database on more than 17 million U.S. discharges annually.The difference between adjusted and unadjusted outcomes "strongly implies that specialty hospitals are treating severely ill patients,"

54. Data and methodology used in calculating physician scores is questionable �Performance measurement is still in its very rudimentary stages. There are a number of challenges to measuring quality & efficiency. It remains difficult to generate accurate provider report cards.� John Armstrong, American Medical Association, Modern Healthcare, April 4, 2005 A large provider threatens to terminate their contract with a major payer Performance Designation Program � affixes stars to doctor�s names on their Website for high quality/lower-cost care The problems: Only 4 of over 1,000 full time faculty received stars -- doctors bill in groups -- unable to break down the claims individually 40% of physicians ineligible due to of insufficient sample size � not enough claims submitted to analyze Physicians evaluated on cost because evidence-based standards for their specialties have not been established Modern Healthcare April 4, 2005 United Health�s Performance designation program is being piloted in 13 states, gives preferred status BJC is giving United Health from April to August 2005 to alter their program.United Health�s Performance designation program is being piloted in 13 states, gives preferred status BJC is giving United Health from April to August 2005 to alter their program.

55. How do you handle multiple problems? Multiple conditions call for multiple guidelines � most guidelines address 1 condition 48% of Medicare beneficiaries have at least 3 chronic conditions Johns Hopkins researchers applied disease�specific guidelines for P4P to a hypothetical 79-year-old female with 4 chronic diseases; hypertension, diabetes, osteoarthritis & osteoporosis The results: 400 pages of guidelines 12 medications costing $400/month with potential for adverse interactions Hypertension & osteoarthritis drugs may decrease the effectiveness of diabetes meds Osteoarthritis drugs may make worsen the hypertension Diabetes & osteoporosis medications may decrease the effectiveness of the hypertension drugs JAMA, August 10, 2005

56. Physicians are concerned with the patient�s role and also with failure to keeping up with changes in medical evidence Physicians can control their process measures, yet outcomes include patient behavior � what about non-compliant patients? What can you do when the evidence changes and the measures don�t? CMS requires ACE inhibitors although new evidence finds patients would be better off with angiotensin receptor blockers (ARB) H&HN March 2006 These are two additional issues with These are two additional issues with

57. The Future of P4P

58. Driving Clinical Performance The �marriage� of Clinical & Performance Mgt solutions� Mairage of clinical and performance management -The �marriage� of Clinical & Performance Mgt solutions� Mairage of clinical and performance management -

59. What IT Can Do For You Put an end to spread sheets and most manual chart review

60. IT Can Bring it Together So long as organizations are struggling to gather data, using it to drive clinical quality will come second Adaptability �Evidence� changes over time Every payer, every QIO, every hospital has their own measures and they are making more every day McKesson estimates that up to 90% of chart abstraction can be automated with current advanced clinical information systems.

61. Avoiding the nightmare of proliferation of measures & reporting Institute of Medicine (IOM) Establish the National Quality Coordination Board (HHS) Comprehensive system to measure and report on the performance of providers and organizations Immediate adoption of an evidence-based starter set of existing measures ambulatory acute care long-term care dialysis centers http://www4.nationalacademies.org/news Dec. 2005 IOM=Institute of Medicine National standards without everyone making up their own. Scientific based- versus cost based.IOM=Institute of Medicine National standards without everyone making up their own. Scientific based- versus cost based.

62. The AMA steps up The AMA is: Promising Congress it will develop a list of 140 standards of care quality measures spanning 34 areas by Dec. 07 Physicians will voluntarily report performance to the government on 3 to 5 measures Physicians will be reimbursed for the data collection & reporting New York Times Feb. 2, 2006 Secret meeting with Congress. Other medical societies are not pleased. Secret meeting with Congress. Other medical societies are not pleased.

63. Consumers may have a greater role in driving quality? Consumer-directed Health Plans (CDHPs) Strive to give consumers a greater stake in healthcare cost and quality Health Savings Accounts � now offered by 75% of employers Studies show that references from providers, family and friends trump online and printed quality information. Source: Kaiser Family Foundation Study 2005 Traditionally consumers are not driven by healthcare quality reports.Traditionally consumers are not driven by healthcare quality reports.

64. Construction matters... �As efforts move forward to develop electronic medical records, we need to make sure they are constructed in a way that simplifies efforts to use them as the basis for healthcare quality assessments.� Catherine MacLean, RAND Health Rand Study Feb. 23, 2006

65. Thoughts to leave you with� P4P initiatives will continue to accelerate and manual data collection will become increasingly burdensome Clinical Information Systems will be an economic necessity Financial and clinical data will become closely integrated. The HIPAA claims attachment will require clinical documentation

66. Bottom Line Unfortunately P4P may not pay off for your facility (as currently implemented) Do not limit yourself to a reactive approach to outside influences Its all about your patients Use your clinical information systems to establish your own quality, outcomes goals, and research goals � go for it!

67. Get going! Good Luck!