Update from the Lily Pad Greg Belden, MBA Director, Regional Implementation

1. Update from the Lily Pad Greg Belden, MBA Director, Regional Implementation

2. Failures in the Quality and Safety of Care • Patients receive recommended health care only 55% of the time1 • 30% of all direct health care costs are due to poor care • Misuse, under-use, overuse, and waste2 • Poor quality care costs between $1,900 and $2,250 per covered employee year2 • Poor quality means lives lost and mistakes made • Up to 98,000 deaths/year due to medical mistakes3 1McGlynn et al. 2003 2Midwest Business Group on Health/Juran Institute 2003 3Institute of Medicine 1999

3. Gridlock in the Health Care System Health Plans Not Letting Provider Value Show Through Providers Not Seeing Case for Reengineering Purchasers Not Buying Right, Toxic Payment System Consumers Not In the Quality Game Everyone Responsible, No One Accountable New Thinking is Needed to “Leapfrog” the Gridlock

4. The Leapfrog Movement

5. Leapfrog’s Mission Trigger giant leaps forward in the safety, quality and affordability of health care by: • Supporting informed health care decisions by those who use and pay for health care • Promoting high-value health care through incentives and rewards

6. The Leapfrog Operating System Inform & Educate Consumers Multipliers:Health plan products Member Support & Activation Compare Providers CMS & state purchasers Improved Value Rewarding & Creating Incentives for Quality & Efficiency Other distribution channels & partners

7. Pillars for Improving Value Standard Measures & Practices Incentives & Rewards Transparency

8. Standard Measurements & PracticesWe must ‘speak the same language’ when asking hospitals & doctors to report – national standards are essential

9. Four Quality & Safety ‘Leaps’ and Beyond Four Leaps • CPOE- Computer Physician Order Entry • IPS- Staffing ICUs with intensivists • EHR- Evidence-based hospital referral for patients needing high-risk care to hospitals with the best track record and experience • NQF- Safe Practices Score- safety score of 27 other National Quality Forum (NQF) -endorsed safe practices And Beyond…. • Additional measures- Leapfrog Hospital Insights, leap refinements and measure “harmonization” coming in 2007!

10. Leap Applicability to Urban/Rural Hospitals 2001-2003- Leaps Apply to Only Urban Hospitals • Areas where consumers have a choice of hospitals • Do not want to raise public expectation that rural hospitals should prioritize the leaps 2004 and Beyond- Leaps Apply to Urban and Rural • 2 leaps (NQF Safe Practices and EHR) apply to rural hospitals

11. TransparencyMake reporting results routine and use results to make health care purchasing decisions

12. Public Reporting of Quality Measurements Improves Quality • (p < .001, N=34) • Reference: Hibbard et al. Health Affairs 2003;22(4):84

13. Building a Dashboard of Information

14. Leapfrog Hospital Quality and Safety Survey • Largest national volunteer public reporting effort • Hospital participation continues to grow • Significant progress with ICU staffing (from 10% of ICUs to 27% today) • Slow progress with CPOE • Sizable effort to improve wide range of other patient safety practices • High correlation between hospitals who perform well on our survey and patient satisfaction (PressGaney)

15. Leapfrog: Unique in the Reporting Milieu • Represent employers/purchasers/consumers’ interests- the end users! • Measures are all NQF-endorsed • Seeks public accountability • Performance measures that are “not the low hanging fruit” (e.g., CPOE, IPS) • Full range of measures—structural, process and outcome • Regional and national in scope • Recognizes high performance and improvement • Concerted effort to “harmonize”

16. Leapfrog Survey Results are Public

17. Leapfrog’s Regional Roll-Outs: Providing a National Backdrop for Regional Change • Regions drive data collection: • Invite hospitals to complete national survey • Recognize hospitals for participation and performance • Use various incentives and rewards for performance • 31 Regional Roll-Outs (Regions in Green)

18. Who Are Our Current RRO Leaders?

19. Tracking Our Progress: Leapfrog’s Longitudinal Reporting Tool

20. Some National Survey Stats • Over 55% of consumers in U.S. live w/in25 miles of 3+ hospitals reporting to Leapfrog! • 48.7% w/in 25 miles of IPS-compliant hospital • 47.7% w/in 25 miles of NICU-compliant hospital • 54.3% w/in 25 miles of NQF-compliant hospital • But….. • 70 million people still w/out access to a Leapfrog reporting hospital w/in 25 miles • What about IA?

21. The Midseason Leapfrog Standings: Opportunity for Improvement

22. Leapfrog in Iowa Kudos to Genesis Medical Center!

23. Incentives & RewardsEncourage better quality of care through incentives and rewards

24. Incentive and Reward Tactics • Public Reporting • Benefit Design- Steerage • P4P- Direct Rewards If you aren’t directly involved in the above value-based purchasing tactics, make sure your health plans are! How? NBCH’s eValue8, Leapfrog’s Health Plan User Groups,etc.

25. EXAMPLE: Public ReportingHC 21’s Annual Consumer Guide

26. EXAMPLE: Benefit DesignState of ME’s Hospital Tiering Program • Criteria for Preferred Hospitals • Leapfrog Safe Practices Survey • The hospital completed the National Quality Forum (NQF) endorsed safe practices that universally can be used in all clinical settings • Maine Health Management Coalition (MHMC) Medication Spotlight Systems Review • Centers for Medicare & Medicaid (CMS) Clinical Measures • Immediate impact in market since announcement of steerage program in July • ME’s Leapfrog hospital participation rate jumped from 50% to over 90%!

27. Leapfrog Hospital Rewards Program™ : Value-Based Purchasing for the Private Sector • Easy-to-manage national hospital Incentive & Reward program for the private sector • But health care is local! • Flexible enough for employers and health plans to implement regionally as their hospital VBP strategy • Inspired by the CMS-Premier Hospital Quality Incentive Demonstration • Designed through multi-stakeholder collaboration and vetted through leading experts • Designed and implemented in partnership with Medstat

28. LHRP Program Goals • Activate consumers: provide actionable hospital performance information to beneficiaries • Reduce trend: potential for purchaser/payer savings as hospital performance improves • Improve patient care: incentives & rewards motivate hospital performance improvement • Encourage regional partnerships through implementation • Design an incentive & reward framework that is: • Win-win: financial bonuses based on shared savings • Advancing consumers’ ability to make informed health care decisions • Customizable based on market-level partnerships

29. Total Potential Total Top 10 Clinical Focus Groups NQF-approved 1 2 Ranked by Potential Opportunity for Savings Opportunity Payments measures? CORONARY ARTERY BYPASS GRAFT $62,666,869 $691,772,784 Yes PERCUTANEOUS CORONARY INTERVENTION $58,157,873 $717,954,275 Yes ACUTE MYOCARDIAL INFARCTION $53,616,015 $607,227,166 Yes COLON SURGERY $38,389,673 $396,004,245 HEART FAILURE $34,983,226 $224,919,006 COMMUNITY ACQUIRED PNEUMONIA $29,536,322 $355,686,956 Yes OTHER CARDIAC SURGERY $25,767,191 $211,578,764 DELIVERY AND NEWBORNS $23,368,721 $1,781,273,763 Yes VASCULAR SURGERY $16,412,194 $133,287,531 SPINE - OTHER $12,925,843 $422,595,301 1 Total Payments x Readmission Rate 2 Premier Commercial Payment data (10/2001 - 9/2002) National Program: Measures 5 Clinical Areas • 33% of commercial inpatient admissions • 20% of commercial inpatient spend • Opportunity for quality improvement • Actuaries show potential dollar savings as quality improves • NQF endorsed measures available & already being collected

30. Quality & Efficiency Measures • Helps to determine hospital value by measuring hospital performance in two dimensions: quality and efficiency • Uses nationally accepted and standardized measures: • JCAHO, Leapfrog Survey, National Quality Forum • Efficiency: first nationally collected/calculated efficiency measure • Foundation of Leapfrog’s expanded set of hospital performance measurement

31. Opportunity to Improve Care Performance Group 1 Performance Group 2 Average Performance Group 3 Performance Group 4 Example: Pneumonia

32. Incentives and • Rewards • 1) Public Recognition • 2) Steerage • 3) P4P- e.g. LHRP, • BTE High Transparency: 1) Initiate LF RRO 2) Encourage Hospital Participation in Leapfrog’s public reporting initiatives Higher Quality Lower Cost Clinical Re-engineering by MDs, Hospitals & Suppliers Value of Health Expenditures Market Sensitivity to Hospital/MD Quality & Cost Performance Comparisons for Hospitals, MDs & Tx Low 2000 Key Evolutionary Steps 2010

33. The Leapfrog Group: Some History 2000:Public launch at press conference 60 member companies 2001:Initial survey results public 6 Regional Roll-Outs Launch initial pay-for-performance programs 2003:National Quality Forum endorses three leaps 2004:Leapfrog survey incorporates NQF Safety Practices Over 600 hospitals attend town hall calls on Leapfrog survey Leapfrog’s Health Plan User Groups launched 2005: Over 1200 hospitals respond to survey Leapfrog Hospital Rewards Program launched 2006:Roll-Outs now total 31. . .targeting more than 50% hospital beds in U.S. 2007:Leapfrog rolls out new survey, _?_ New Regional Roll-Outs

34. The Leapfrog Group: Some Accomplishments Before Leapfrog After Leapfrog Little publicly available information about provider quality No modern pay-for-performance programs Employer voice quiet or focused on frustration Public and private sector purchasers not aligned Public release of provider information considered mainstream Over 150 P4P programs nationally Employers recognized as leaders in driving value agenda CMS, private sector, and state government purchasers agree on principles

35. Employer Report Card: Talk the Talk . . . . . . . . . . . A Walk the Walk . . . . . . . . . C How Are Employers Doing? “As major purchasers of health care services, employers have the clout to insist on change. Unfortunately, they have also been part of the problem. In buying health care services, companies have forgotten some basic lessons about how competition works and how to buy intelligently.”

36. What’s Next?

37. Federal Action • Deficit Reduction Act of 2005 puts principles behind Leapfrog into law for Medicare and Medicaid • President Bush’s Executive Order of August 22, 2006 requires federal health care purchasers to use principles behind Leapfrog in purchasing practices • HHS Secretary Leavitt has challenged top 100 employers to do the same

38. Recommendations • Competitively Bid Health Plans – And Choose the Best • Use Contracts to Insist that Health Insurers: • Publicly Release Quality/Cost Data on Doctors/Hospitals • Pay-for-Performance • Incentives For Employees –Health and Health Care Choices • Focus Your Government Affairs Teams on Health Care • Join Leapfrog and Other Market-Focused Efforts like BTE Why Employers Need to Rethink How They Buy Health Care Robert S. Galvin, MD Suzanne Delbanco, PhD Health Affairs November/December 2005 “Leapfrog’s . . . most important impact has been as a powerful market catalyst.”

39. Leapfrog’s Annual Call for New RROs is Now! Application Deadline is Nov. 30