Aligning Hospital Quality Incentive Programs

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Aligning Hospital Quality Incentive Programs

• Virginians Improving Patient Care
  SafetyAnnual MeetingMay 15, 2003

Sam Nussbaum, M.D. Executive Vice President and
Chief Medical Officer Anthem Blue Cross Blue
Shield
2
Agenda

• Drivers of of Health Care Costs
• Physician Partnerships
• Quality of Care in Hospitals
• Anthem Midwest Hospital Quality Program
• Virginia Quality-In-Sights Hospital Incentive
  Program
• Recognizing and Improving Clinical Performance

3
Shift in Expectation of Health Care Delivery and
Financing
Managing Overall Health Status and Chronic
Illness
Managing Components of Illness
Current
Evolving

• Episode of Care
• Clinical efficacy at time of intervention reacts
  to medical event
• Hospital at center of delivery system
• Quality through the eye of the patient and
  provider viewed as service quality
• Consumer and employer view access and amount of
  health care as the gold standard

• Population health and a system of care for
  chronic illnesses
• Clinical efficacy driven by disease prevention,
  minimal interventionist methods, and on basis of
  economic and clinical aspects of disease
• Pro-active primary care, well integrated with
  specialty services. Hospitals care for
  increasingly ill population
• Quality and outcomes that are evidence-based,
  measurable and improve health and the quality of
  life
• Consumer and employer are actively engaged in
  health promotion and informed decision-making

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Drivers of Health Care Costs

• Population dynamics an aging population with
  chronic diseases
• Medical technology and treatment advances
• Healthcare delivery model - failure of
  evidence-based care, medical errors, reactive
  interventions
• Litigation and risk management
• Health professional shortages
• Navigating the complex system
• Unnecessary care duplication of medical
  services
• Protecting the medical commons failure to
  ration care
• Administrative costs hospitals, insurers,
  medical practices
• Physician and hospital compensation incentives

5
Ensuring Quality Health Care and Managing Costs
In Search of the Holy Grail

• 1980s
• Staff model HMOs (Kaiser, Group Health, Harvard)
• Gatekeeper medical delivery
• Full risk capitation (PacifiCare)
• 1990s
• Physician management companies (MedPartners,
  PhyCor, Pediatrix)
• Vertically integrated health care delivery
  systems
• 2000s
• Benefit design solutions most recently defined
  contribution accountability and cost shifting to
  consumers
• Tiered networks with cost/quality information
• Disease management programs
• Pay for clinical performance

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Reduction in Health Care costs The First
Journey for Health Plans

• Overcapacity in the health care system ? lower
  unit costs
• Risk sharing models with providers - cost
  shifting and significant negative financial
  impact for health systems and physicians who did
  not have infrastructure to manage risk
• Rigorous utilization management
• viewed as intrusive
• limitations in network and access
• Did not address marked variation in cost,
  quality, or address chronic disease

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Distribution of Medical Expenses

Diagnosis Driven
Cost Driven
Medical Costs
Membership
Membership
Medical Costs
Chronic diseases include coronary artery disease,
asthma/COPD, CHF and diabetes
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The Medical Profession Is Changing

• Historically, a craft-based practice
• Individual physicians, working alone, putting
  patients health first
• Handcraft a customized solution for each patient
• Vast personal knowledge gained from training and
  experience
• lt50 of care is evidence-based and there is wide
  variation in practice (Wennberg, Dartmouth Atlas)
• Transformation to profession-based practice
• Plan coordinated care delivery processes
• Clinical information is available at the point of
  care and directs appropriate services and
  therapies drugs, imaging
• This approach leads to fewer quality gaps, better
  patient outcomes and optimizes cost
• Physician scientists advance the science of
  medicine clinicians generate new medical
  knowledge as they practice medicine

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Physician Relationships Building a Partnership
1. Physician and hospital collaboration is the
foundation for programs in health care delivery
to serve our members, improve health status and
optimize medical cost management 2. Engage
physicians and hospitals in meaningful ways to
enhance health care delivery, the practice of
evidence-based medicine and the quality and
safety of care 3. Invest in technologies that
improve clinical care and remove administrative
and transactional burdens 4. Reshape medical
management to better establish collaborative
medical management approach with physicians and
members, moving to programs that improve clinical
care and help patients navigate the complex
health care system 5. Create better understanding
of the health insurance industry, including the
business case for health care clinical
performance and cost management
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Anthem Medical Policy A Model Collaborative
Approach for Physicians

• Rapidly changing science and more complex
  technology (e.g. stem cell transplantation)
• Increased availability, marketing and consumer
  demand for unproven technologies
• Guides the safe introduction of beneficial new
  technology
• Establishes a scientific basis for medical
  necessity determinations and a foundation for
  benefit coverage
• Provides a basis for consistent utilization
  management practices and decisions
• Optimizes claims expense by directing care from
  ineffective technologies
• Supports patient safety by directing care away
  from unsafe interventions

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Anthem Medical Policy A Model Collaborative
Approach for Physicians (Cont.)

• The medical policy group engages the viewpoints
  of academic and community medical experts in the
  states we serve to determine Anthems medical
  policy.
• This policy is available to all physicians on the
  Anthem website
• We are now developing expert academic and
  specialty panels in genetics and oncology and
  working with the American College of Radiology
  for imaging technology evaluation

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Introduction of New Medical Technologies and
Therapies

• If a technology has been demonstrated to be
  effective, through clinical trials, promote it as
  a consistent best practice.
• If a medical technology has conclusively shown to
  not be effective, dont do it.
• If we have insufficient evidence that it is
  effective, assess its clinical value in the
  setting of a clinical trial VA, NH, ME, CT
• Who should support clinical trials?
  (Pharmaceutical companies, NIH, device
  manufacturers, health plans)

The Great Unknown
Supported by Clinical Evidence
Ineffective
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The Institute of Medicines Definition of Quality
Quality of care is the degree to which health
services for individuals and populations increase
the likelihood of desired health outcomes and are
consistent with current professional knowledge.
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Healthcare Quality Defect Rates Occur at Alarming
Rates

Breast cancer screening (65-69)
Outpatient ABX for colds
Hospital acquired infections
Hospitalized patients injured through negligence
Post-MI ?-blockers
Defects per million
Airline baggage handling
Detection treatment of depression
Adverse drug events
Anesthesia-related fatality rate
U.S. Industry Best-in-Class
1 (69)
2 (31)
3 (7)
4 (.6)
5 (.002)
6 (.00003)
? level ( defects)
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Adverse Events in Hospitalized Patients Harvard
Medical Practice Study - HMPS

• New York State 1984
• 30,151 randomly selected discharges
• Chart-based, two-stage review
• Assessed adverse events and role of errors and
  negligence
• Results
• Overall incidence 3.7 of patients
• Proportion resulting in
• death 13.6
• permanent disability 6.5
• Significant number related to drugs and surgery

Preventable
58
Not
Negligent
Not
30.4
Preventable
42
Negligent
27.6
Source Brennan, et al. N Engl J Med.
1991324370-376
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Adverse Events in Hospitalized PatientsMost
Common Types of Events - HMPS
25
Non-operative
Operative
20
15
10
5
0
Drug-
Wound
Tech.
Late
Diag.
Therap.
Nontech.
Proc.
related
infect.
comp.
comp.
mishap
mishap
comp.
related
Source Brennan, et al. N Engl J Med.
1991324377-384
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Causes of Underuse in Health Care

• Barriers to accessing care
• Lack of insurance
• Co-payments/deductibles
• Restricted benefits
• Clinician knowledge deficits
• Rapid accumulation of medical knowledge
• Inadequate supporting processes
• Medical records
• Information technology
• Processes of care

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Proven Effective InterventionsThat Are Underused

• Heart attack care
• Breast cancer care
• Hypertension detection and treatment
• Anticoagulation in atrial fibrillation
• Immunizations

• Inhaled steroids
• Depression detection and treatment
• ACE inhibitors in heart failure
• Diabetic retinal exam
• Prenatal care
• Mammography

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Underuse of Secondary Prevention Strategies
Following Acute Myocardial Infarction

• Four therapies save about 80 lives per thousand
  patients treated for heart attacks
• We reach no more than half of eligible patients
• Over 750,000 Americans suffer heart attacks each
  year
• Therefore, 18,000 preventable deaths occur each
  year in the U.S.

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Anthem Hospital Quality ProgramGoal and Overview

• The goal of Anthems Hospital Quality Program is
  to continuously improve the quality of health
  care delivered in Anthem network hospitals
• A broad and comprehensive set of metrics that
  address quality of care, clinical outcomes,
  patient safety, processes of care and
  organizational management structure. These
  measures are based upon best hospital practices
  and are developed through an interactive process
  with hospitals. Reporting is for all hospital
  patients and based on an honor system.

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Anthem Hospital Quality ProgramCore Indicators

• Board and Management Involvement
• JCAHO/Licensure
• Obstetrical Care
• Patient Safety
• Cardiac Care including coronary artery bypass
  grafts, PTCA, acute myocardial infarction and
  congestive heart failure
• Asthma Care
• Emergency Department Care
• Joint Replacement
• Breast Cancer Care
• Distinct Childrens Hospital Programs

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Anthem Hospital Quality Program Clinical Metrics

• Data is all payer data, including Medicare
• Data is self reported with CEO sign-off and can
  be audited
• Cardiology and C-Section data is risk adjusted
• Indicator selection determined by
• high volume and high risk procedures
• KY, IN and OH Hospital Associations
• Epidemiologist, statistician, KY Medical
  Association, other
• Contractual agreement that data will be kept
  confidential
• Over 340 participating hospitals in OH, KY, IN

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Anthem Hospital Quality Program How the Program
Works

• Hospitals submit data on selected quality metrics
• Anthem produces a scorecard from submitted
  all-patient data
• Peer comparison
• Site visits
• Minimum score to participate in the Coronary
  Services Network
• Action plans for institutions not achieving
  threshold results

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Anthem Coronary Services Network

• Coronary Artery Bypass Grafts (CABG)
• number of procedures
• mortality
• return to OR
• saphenous vein use
• infections
• Percutaneous Transluminal Coronary Arteriography
  (PTCA)
• number of procedures
• repeat PTCA
• failed PTCAs which go onto CABG within 24 hours
• primary PTCA for acute myocardial infarction

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Anthem Coronary Services Network

• Myocardial Infarction (MI)
• number of patients with MI
• time to PTCA
• time to thrombolytic therapy from ER (door to
  drug)
• aspirin use in 24 hours
• mortality
• ß-blocker use
• critical pathway use
• number with LVEF lt 40 prescribed ACE inhibitors

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Anthem Hospital Quality Program Patient Safety
Indiana Kentucky Ohio Patient safety as a
89/96 93 86/94 94 138/143 97 strategic
goal Encourage error 76/77 99 87/92
95 137/143 96 reporting Safety
Committee 69/73 95 84/93 90 129/137
94 Electronic physician 2/77 3 5/91
5 10/141 7 order entry Pharmacist dedicated
23/69 33 25/81 31 52/137 38 to ICU reviews
all medication orders Pharmacist makes patient
17/69 25 13/79 17 37/137 27 rounds with
physicians
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Hospital Quality Indicators for Childrens
Hospitals

• Quality of Care
• Clinical guidelines for asthma emergency room
  and inpatient
• Asthma treatment with steroids
• Cystic fibrosis clinical pathways (also
  accreditation by CF Foundation)
• Appendectomy clinical pathway
• Tonsillectomy/adenoidectomy clinical pathways
• Processes of Care
• Emergency room wait time
• Appendectomy consultation time/decision time

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Hospital Quality Indicators for Childrens
Hospitals

• Outcomes of Care
• Low and Very Low Birth Weight (VLBW) Infants
• Infant Mortality for VLBW Infants
• Appendectomy Ruptured/perforated Appendix
• Tonsillectomy/Adenoidectomy Operative
  hemorrhage, readmissions (dehydration/bleeding)
• Standards for Care
• Emergency Room Nurses Certified With Pediatric
  Advanced Life Support
• Neonatal ICU Nurses With Neonatal Resuscitation
  Program Training
• JCAHO Scores

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Anthem Hospital Quality Program Creating Value
with Hospitals

• Identify variation in outcomes
• Enhanced communication
• Benchmarking best practices
• Convening and sharing clinical successes
• Improved clinical outcomes
• Workgroups for engagement on indicators and
  program improvement
• Investment in infrastructure vs. structure
• Provide ongoing results on performance
• Hospitals believe that care has improved as a
  result of Anthem program

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Lessons on Metric Selection
Source Advisory Board, 2002
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Crossing the Quality Chasm A New Health Care
System for the 21st Century
Recommendation 10Private and public purchasers
should examine their current payment methods to
remove barriers that currently impede quality
improvement, and to build in stronger incentives
for quality enhancement.
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Improving Health Care Financial Incentives for
Quality

• Dominant methods of payment today dont achieve
  goal of clinical quality.
• Fee-for-service payments encourage overuse
• Capitated payments encourage underuse
• Neither systematically rewards excellence in
  quality
• Strategy is undercut by difficulties in measuring
  quality and adjusting for risk in a way that
  means something to consumers.
• Some early experiments in rewarding quality with
  more favorable payments, but very limited.

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Improvement on Clinical EfficiencyImpact on Net
Income to Hospitals
Payment Mechanism
Discounted FFS
Per Case (DRG)
Per Diem
Shared Risk
Improvement to Cost Structure

• Decrease unit cost
• Decrease of units per admission
• Decrease length of stay
• Decrease of admissions
• Improve quality outcomes
• i.e. decrease hospital infection rates

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Anthem Hospital Quality Program 2002 Hospital
Quality Program Scorecard
Possible Percent of Section Points Total
Score Hospital QI Plan and Program 29 20
Joint Commission Grid Score 10 7
ED/Asthma/Pneumonia 24 17 Cardiac Care 22 15
Joint Replacement Care 22 15 Obstetrical
Care 16 11 Cancer Care 8 6 Acute MI/Congestive
Heart Failure 8 6 Patient Safety 6 4 TOTAL 145
100
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Rewarding High Scores Creates a Tangible
Incentive for Progress
Reimbursement Increase Schedule
Relative Reimbursement Rate
Proportion of rate increase based on clinical
quality
Base increase in hospital contract rate
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Virginia Quality-In-Sights Hospital Incentive
Program

• 3-year collaborative program centered on
• Incentive Component
• patient safety 30
• patient outcomes 55
• patient satisfaction 15

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Virginia Quality-In-Sights Hospital Incentive
Program

• Patient Safety - 30
• Meet 6 JCAHCO patient safety goals
• Improve the accuracy of patient identification
• Improve the safety of using high-alert
  medications
• Eliminate wrong-site, wrong-patient and
  wrong-procedure surgery
• Improve the safety of using infusion pumps
• Improve the effectiveness of clinical alarm
  systems
• Improve the effectiveness of communication among
  caregivers
• Implement 3 patient safety initiatives
• Computerized Physician Order Entry
• ICU staffing standards
• Automated pharmaceutical dispensing devices
• Report 2 patient safety indicators
• Anesthesia complications, post-operative
  bleeding, etc.

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Virginia Quality-In-Sights Hospital Incentive
Program

• Patient Outcomes - 55
• Improve indicators of care for patients with
  heart disease
• Participation in ACC cardiovascular data registry
• Cardiac Catheterization and Percutaneous Coronary
  Intervention indicators
• Acute MI or heart failure indicators
• Administer aspirin, beta blockers at ER arrival,
  discharge
• Smoking cessation
• CABG indicators
• Pregnancy-related or community acquired pneumonia
  indicators
• Patient Satisfaction - 15
• Survey of Anthem members
• Link between improvement in care processes
  outcomes and patient satisfaction

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Anthem East Clinical Quality Program

• In the hospital
• Reducing adverse drug events and nosocomial
  (hospital acquired) infections, and implementing
  intensivist programs in the ICU.
• In the physician group practices
• Improving the health of, and lowering the cost of
  treating, patients with chronic illnesses,
  especially diabetes
• Appropriate use of imaging procedures

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Quality Performance Incentives for Primary Care
Physicians

• New Hampshire program for primary care physicians
  serving 370,000 Anthem members
• Quality measures breast and cervical cancer
  screening, immunizations, retinal exam for
  diabetes, referral to disease management programs
• Incentives provided at the practice level.
  Awards of 20 per member for top quartile
  performance, 10 per member for second quartile
  performance
• Improvement in clinical performance

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Quality Performance Incentives for Primary Care
Physicians
Not measured
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Obstetrics and GynecologyPayment for Clinical
Performance and Quality The Columbus, Ohio Pilot
Program

• Approach
• Preventive care mammography, pap smear
• Patient satisfaction
• American College of Obstetrics and Gynecologys
  guidelines for hysterectomy
• Generic index for pharmaceuticals
• Recognition and reward
• No precertification or concurrent review
  requirements
• Positive adjustment in reimbursement

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Obstetrics and GynecologyPayment for Clinical
Performance and Quality The Columbus, Ohio Pilot
Program

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Medical Management A Changing Landscape

Traditional precertification, referral
authorization, utilization review
ProgressiveDisease management, advanced care
management

• Hospital Utilization - manage hospital
  utilization through appropriateness of admission
  and length of stay
• Focus - one size fits all utilization
• Clinical Management - wide variation in regional
  clinical practice pattern
• Financials ROI minimal
• Members view as barriers to care
• Physicians consider these approaches
  administrative hassles that increase office costs
  and personal intervention
• Partnership Approaches add cost and create
  dynamic tension

• Manage hospital admissions by preventing
  deterioration in health status
• Targeted at high impact members
• Evidence-based care models more consistent
  approaches to care
• ROI analyses incomplete promising early results
• View care navigation positively, gt90 acceptance
• Viewed as promoting the delivery of quality care
  and helping them manage challenging patients
• Models are collaborative

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Summary Anthems Pay for Clinical Performance
Program

• By collaborating with hospitals and physician
  groups and hospitals, we will
• Improve the health of our members and the
  community
• Identify and promote best quality and safety
  practices
• Pay providers a premium for quality and safety
  improvements
• Reduce the costs associated with medical errors
  and quality defects
• We have identified opportunities for
  collaborative relationships that enable us to
  measure and improve quality and safety, implement
  care processes, and optimize quality-based care
  management