1. Third Sino-U.S. Conference on Medical Professionalism Allan M. Korn M.D., FACP Blue Cross Blue Shield Association Happier Doctors Healthier Patients

2. © 2008 Blue Cross Blue Shield Association 2 Happier Doctors, Healthier Patients ● Evidence Based Care ● Better Outcomes ● Meaningful doctor-patient relationship ● Durable doctor-patient relationship ● Trusting doctor-patient relationship ● Much more pride in medical practice ● The basis for a harmonious society

3. © 2008 Blue Cross Blue Shield Association 3 Medical Professionalism ● Results in more satisfaction with clinical practice ● Results in patients trusting you while engaging in their own care ● Nurtures trust between doctors, hospitals and patients ● Meets the needs of society with personal pride and scientific accuracy ● Opens minds, opens hearts, and demands integrity in all that is done for patients, peers, and nation.

4. © 2008 Blue Cross Blue Shield Association 4 Hospital Rewards accelerate quality improvement New England Journal of Medicine February 2007 “Public Reporting and Pay for Performance in Hospital Quality Improvement”; New England Journal of Medicine; February 2007; Peter K. Lindenauer, M.D., M.Sc.; Denise Remus, Ph.D., R.N.; Sheila Roman, M.D., M.P.H.; Michael B. Rothberg, M.D., M.P.H.; Evan M. Benjamin, M.D.; Allen Ma, Ph.D.; and Dale W. Bratzler, D.O., M.P.H. ● Rewarded hospitals showed greater improvement in all composite measures of quality ● Rewards associated with improvements above public reporting ranging from 2.6 to 4.1% over the 2-year study period

5. © 2008 Blue Cross Blue Shield Association 5 More Patients Receive Evidence-based Care Avg. improvement in all clinical areas (15 quarters) 52.6% Clinical Area Percent Improvement AMI (Heart Attack) 21.6% CABG (Coronary Bypass) 64.3% Pneumonia67.8% Heart Failure50.5% Hip & Knee58.6% Appropriate Care Score Source: Center for Medicare & Medicaid and Premier Inc. Hospital Quality Improvement Demonstration Project (HQID) http://www.premierinc.com/quality-safety/tools-services/p4p/hqi/index.jsp

6. © 2008 Blue Cross Blue Shield Association 6 Government sponsored programs Study demonstrates that when evidence-based care is reliably delivered, quality is higher and costs are lower (over 1.1 million patients). Patient Process Measure Study finds higher reliable care yields lower mortality rates for heart bypass surgery patients Study finds higher reliable care yields lower hospital costs for patients with pneumonia Source: Center for Medicare & Medicaid and Premier Inc. Hospital Quality Improvement Demonstration Project (HQID)

7. © 2008 Blue Cross Blue Shield Association 7 Findings from Government sponsored programs ● Financial incentives combined with public reporting of transparent data can drive significant improvement in quality – Hospitals held the gains and continued to improve ● More patients are reliably receiving evidenced-based care ● Improved quality is associated with saving lives and reducing costs

8. © 2008 Blue Cross Blue Shield Association 8 Designation for quality recognition in physician directories, award certificates for office display, etc. Recognition Aligning incentives is a key driver for successful collaboration. Physician Specialist Incentives Integration of American Board of Internal Medicine Practice Improvement Modules, or Blue Cross Blue Shield quality based recognition programs, or Special recommendations to patients to seek physicians and hospitals which have achieved high-quality, evidence-based care. Reward

9. © 2008 Blue Cross Blue Shield Association 9 Evidence: Recognized physicians have higher quality results! Study 1 examined routine screening for a variety of patients: – Cancer screening – Routine laboratory screening for diabetics – Routine laboratory screening for heart disease patients – Routine laboratory screening for hypertensive patients Study 2 examined several dimensions of diabetic care: – Routine laboratory screening – Eye exams In two separate studies, it was demonstrated that recognized physicians score higher at essential elements of patient care.

10. © 2008 Blue Cross Blue Shield Association 10 When Primary Care Doctors Treat Patients… ● Chronic diseases receive better care – Patients with congestive heart failure had 35% fewer hospital days; – Patients with diabetes had significant reductions in cardiovascular risk; – Asthma and diabetes patients were more likely to receive appropriate therapy. ● Access to needed care, receipt of routine preventive screenings, and management of chronic conditions improve substantially. ● If every American had access to comprehensive primary care, national health care expenditures would drop by 5.6% -- equal to national savings of at least $67 billion per year.

11. © 2008 Blue Cross Blue Shield Association 11 The Primary Care Model ● Trusted personal physician ● Physician who provides, manages and facilitates care ● Care is coordinated or integrated across healthcare system ● More accessible practice with increased hours and easier scheduling ● Enhanced payment that recognizes the added value of delivering care through the PCMH model ● Assistance to practices seeking transformation ● Support to practices adopting HIT for QI PatientPersonal Physician

12. © 2008 Blue Cross Blue Shield Association 12 The Primary Care Model Changes in Clinician Incentives Fee For Service Fee for service Prospective payment Pay for outcomes Blended Payment Improved Patient Interaction Better Work Environment Team effort Increased responsibility for admin and clinicians More time for patients Better communication and access Case management Personal Physician

13. © 2008 Blue Cross Blue Shield Association 13 Financial incentives lead to meaningful outcomes improvements in primary care

14. © 2008 Blue Cross Blue Shield Association 14 Sending the right message to physicians with financial incentives How do we provide the right incentives for physicians to deliver high quality, patient-centric, efficient care? Problems with productivity SalarySalary Problems with overuse Fee-for-serviceFee-for-service Problems with underuse CapitationCapitation Problems with ignoring what’s not attached to additional payment Pay-for-QualityPay-for-Quality

15. © 2008 Blue Cross Blue Shield Association 15 Blue Distinction raises the level of care delivered across the country by focusing on evidence-based quality and outcomes that are reinforced through national incentives Physician Controlled, Evidence Based Blue Distinction Vision

16. © 2008 Blue Cross Blue Shield Association 16 National Presence Blues achieve national presence, with over 800 Blue Distinction designations spanning 45 states Blue Distinction Centers for Cardiac Care SM Blue Distinction Centers for Bariatric Surgery SM Blue Distinction Centers for Transplants SM Blue Distinction Centers Complex & Rare Cancers SM

17. © 2008 Blue Cross Blue Shield Association 17 Outcomes from Clinical Data Inpatient Mortality Cardiac BDCs demonstrate better overall outcomes Inpatient Mortality Post Heart Attack Statistically significant difference Inpatient Mortality Post Bypass Surgery *Risk-adjusted Source: 2005-06 Hospital RFI Data Submitted to the Blue Cross and Blue Shield Association 7% 9% 3% 2% MeanMean* BDCOther

18. © 2008 Blue Cross Blue Shield Association 18 Outcomes from Clinical Data Blue Distinction Centers demonstrates better, more consistent overall outcomes Source: Hospital RFI Data Submitted to the Blue Cross and Blue Shield Association Inpatient Mortality Post Heart Attack Mortality Rate One-year Post Heart Transplant BDCOther 11% 19% Mean 7% 9% Mean

19. © 2008 Blue Cross Blue Shield Association 19 Happier Doctors ● Reward from medical practice: pride and peer approval ● Reward from payers: higher income based on better patient outcomes ● Reward from the nation: admiration and gratitude ● Reward from international colleagues: acceptance and integration of joint programs and initiatives

20. © 2008 Blue Cross Blue Shield Association 20 Healthier Patients ● Better clinical outcomes ● Consistent management of chronic illness ● Trust that there is a caring relationship with a healer ● Belief that someone with special knowledge cares for him or her ● Safety from ineffective or unnecessary care ● Security for families and individuals

21. © 2008 Blue Cross Blue Shield Association 21 Harmonious Society ● Doctors and professional societies have aligned incentives ● Doctors, hospitals, and patients have aligned incentives ● Ministries and all healthcare stakeholders have aligned incentives ● Chinese patients deserve optimal health and productivity. THE INCENTIVE: Doing the right thing right, the first time, based on the best available clinical evidence. This creates the opportunity for medical and financial security.

22. © 2008 Blue Cross Blue Shield Association 22 Contact Information Allan M. Korn, M.D., FACP Senior Vice President Clinical Affairs and Chief Medical Officer Blue Cross Blue Shield Association 225 North Michigan Avenue Chicago, Illinois 60601 312.297.6840 allan.korn@bcbsa.com