Bridges To Excellence

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Pay-for-Performance and Value-Based Purchasing
Bridges to Excellence and The Leapfrog Hospital
Rewards Program Presented by Guy DAndrea June
8, 2006
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What is the Health Care System Supposed to Do?
Health care spending
Healthy/ Low Risk
At-Risk
High Risk
Active Disease
Early Symptoms
20 of people generate 80 of costs
A value-based health care system
Source HealthPartners
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Every system is perfectly designed to achieve
exactly the results it gets. Donald M.
Berwick, MD, MPP President and CEO Institute for
Healthcare Improvement
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Problems in the U.S. Health System

• 1999 IOMs To Err is Human reports up to
  98,000 Americans die each year from medical
  errors
• 2001 IOMs Crossing the Quality Chasm further
  details health system issues
• Chasm between optimal care and actual care
• System ill-equipped to manage chronic conditions
• Poor organization and continuity of care
• 2003 RAND study (McGlynn, et al) finds that
  optimal care is delivered only about 55 of the
  time.

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Health Spending as a of GDP
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IOM Strategy to Cross the Quality Chasm

• Applying Evidence to Health Care Delivery
• Using Information Technology
• Preparing the Health Care Workforce
• Aligning Payment Policies with Quality Improvement

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The Toxic Payment System

• The health payment system
• Rewards activity
• Is indifferent to quality
• Does not recognize the continuum of care
• Across providers
• Over time
• Information Asymmetries / Lack of Transparency

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What is Value-Based Purchasing?

• A multi-dimensional strategy to improve the
  function of the health care market to create and
  reward value
• Focused on all levels of the system
• Health plans (e.g., eValue8)
• Providers (BTE, LHRP)
• Consumers (Education, Benefit Design)

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VBP Strategies

• Top-Down
• Formularies
• Medical management (UM, CM, DM)
• Managed Care
• Bottom-Up
• Capitation
• DRG payment
• Tiered networks
• Tiered benefit design
• Consumer education and incentives
• Provider performance transparency
• Pay-for-performance

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What is Pay-for-Performance?

• P4P programs pay more to providers who
  document compliance with specified performance
  standards
• Goals
• Reward higher quality and/or efficiency
• Fund quality investments (e.g., health IT)
• Minimal disruption to processes of care
• Increase value of health care spend

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Measurement Leads to Improvement
Physicians Achieving Recognition ADA/NCQA
Diabetes Physician Recognition Program of
adult patients with
Diabetes Physician Recognition Program, average
performance of applicants, 1997-2003 data.
Lower is better for this measure.
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What is Bridges to Excellence?

• BTE is a program to improve the quality of health
  care by aligning payment with performance.
• Employers/payers decide to participate in BTE
• Physician performance is measured through the
  NCQA recognition process
• Recognized physicians receive financial rewards
  for each of their patients who is an employee or
  member of a participating payer

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3 BTE Rewards Programs
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Structure

• Access and Communication
• Patient Tracking and Registries
• Care Management
• Patient Self-Management Support

• Electronic Prescribing
• Test Tracking
• Referral Tracking
• Performance Reporting and Improvement
• Interoperability

Process Outcomes

• LDLs tested and controlled
• BP tested and controlled
• Use of aspirin
• Smoking cessation advice

• HbA1Cs tested and controlled
• LDLs tested and controlled
• BP tested and controlled
• Eye, Foot and Urine exams

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Leapfrog Hospital Rewards Program

• Focuses on five conditions prevalent in
  commercially insured population
• AMI
• CABG
• PCI
• CAP
• Newborn Deliveries
• Measures Quality and Efficiency
• Relative benchmark hospital rankings based on
  peer performance
• Rewards both improvement and top performance
• Rewards based on 50 shared savings model
• leapfrog.medstat.com/hrp

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LHRP Performance Measurement
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Business Perspective on P4P

• Why should we pay providers for something they
  should already do?
• Positive financial ROI
• Improved employee health and productivity
• Rationalize the health system

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Provider Perspective on P4P

• How Dare You!?! (but . . .)
• ACP and AAFP have endorsed BTE
• AMA P4P Principles
• Quality of Care
• Patient/Physician Relationship
• Voluntary Participation
• Accurate Data and Fair Reporting
• Fair and Equitable Incentives

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Evolution of VBP and P4P

• 1st Generation (Today)
• Somewhat crude overlays to health system
• Additional administrative burden to collect data
  and process rewards
• 2nd Generation (Tomorrow)
• More complete, refined measures, more integrated
  with systems
• Better risk adjustment
• Automated administration (HIT/HIE is key)
• 3rd Generation (Future?)
• Full Integration
• VBP and P4P disappear
• Creation of efficient markets