Healthy patients. Healthy hospitals. Early Results from the Premier-CMS Hospital Quality Incentive Demonstration Program Stephanie Alexander Senior Vice President Premier, Inc. The Quality Colloquium on the campus of Harvard University August 23, 2005

© 2005 Premier, Inc. 2 The first national project to measure hospital performance and offer additional Medicare payment for top quality care “Pay for quality” Can economic incentives effectively improve quality of care? CMS/Premier Hospital Quality Incentive (HQI) Demonstration Project CMS/Premier HQI Demonstration Project Program Introduction

© 2005 Premier, Inc. 3 Is there a business case for quality in hospitals? Hospitals Performance Group Innovation Group Opportunity Group Top decile in performance (low cost and high quality) Bottom quartile in performance (high cost, low quality) Lowest Performance Top Performers

© 2005 Premier, Inc. 4 CABG Performance Source: Premier Perspective TM CMS/Premier HQI Demonstration Project

© 2005 Premier, Inc. 5 Thomas Scully Former Administrator, Centers for Medicare and Medicaid Services, 2003 “I don’t think it makes a lot of sense to pay every hospital in Boston exactly the same amount for a hip replacement regardless of their quality, but we are.” Premier/CMS HQI Demonstration Project Mark McClellan, M.D., Ph.D. Administrator, Centers for Medicare and Medicaid Services, 2004 "Our goal at Medicare is to stimulate care that is efficient and effective for every patient. The Premier/CMS demonstration, and others that are a part of the new Medicare law, will help us work with providers to improve the quality of care that our beneficiaries receive."

© 2005 Premier, Inc. 6 A three-year effort linking payment with quality measures (launched October, 2003) Top performers identified in five clinical areas Acute Myocardial Infarction Congestive Heart Failure Coronary Artery Bypass Graft Hip and Knee Replacement Community Acquired Pneumonia Indicators within AMI, CABG, HF, and CAP represent all patients (all payers). Hip and knee replacement indicators apply only to Medicare patients. CMS/Premier HQI Demonstration Project Program Overview

© 2005 Premier, Inc. 7 CMS/Premier HQI - National participation Over 270 participating hospitals CMS/Premier HQI Demonstration Project

© 2005 Premier, Inc. 8 Composite Quality Index will identify hospitals performing in the top two deciles in each clinical focus group Composed of two components:  Composite Process Rate  Risk-Adjusted Outcomes Index o Clinical conditions without outcomes indicators use only the Composite Process Rate CMS/Premier HQI Demonstration Project Identifying Top Performers

© 2005 Premier, Inc. 9 “Top Performers” are defined annually as those in the first and second decile Incentive payment threshold changes each year per condition Top decile performers in a given clinical area receive a 2 percent Medicare payment supplement per clinical condition Second decile performers receive a 1 percent Medicare payment supplement per clinical condition. Payment Overview

© 2005 Premier, Inc. 10 Anticipated payment scenario 1st Decile Hospital Year OneYear TwoYear Three Top Performance Threshold Payment Adjustment Threshold 2nd Decile 3rd Decile 4th Decile 5th Decile 6th Decile 7th Decile 8th Decile 9th Decile 10th Decile 1st Decile 2nd Decile 3rd Decile 4th Decile 5th Decile 6th Decile 7th Decile 8th Decile 9th Decile 10th Decile 1st Decile 2nd Decile 3rd Decile 4th Decile 5th Decile 6th Decile 7th Decile 8th Decile 9th Decile 10th Decile Condition X Payment Incentive Payment Adjustment - Year 3 + 2% + 1% - 2% - 1%

© 2005 Premier, Inc. 11 Transparency in measures The CMS/Premier quality measures are based on clinical evidence and industry recognized metrics with standardized definitions from: All 10 indicators from the National Voluntary Hospital Public Reporting Initiative 27 indicators from the National Quality Forum (NQF). 24 indicators from CMS 7th Scope of Work. 15 indicators from JCAHO Core Measures. 3 indicators proposed by The Leapfrog Group. 4 indicators from the Agency for Healthcare Research and Quality’s (AHRQ) patient safety indicators (2 PSIs applied to 2 clinical populations). CMS/Premier HQI Demonstration Project

© 2005 Premier, Inc. 12 Transparency in reporting Public reporting Top 50% of participants by clinical area  No rankings  Individual indicator values, not overall score Frequency: every 6 to 12 months Expect first reporting Fall 2005 Reporting within the group In most cases, fully transparent – knowledge transfer

© 2005 Premier, Inc. 13 Current Progress: HQI Results to Date

© 2005 Premier, Inc. 14 CMS/Premier HQI Project Already showing significant improvement

© 2005 Premier, Inc. 15 CMS/Premier HQI Project Reduction in variation and improvement trend (AMI)

© 2005 Premier, Inc. 16 Reduction in variation and improvement trend: CAP

© 2005 Premier, Inc. 17 CMS/HQI Hospital Performance Against Benchmark Outperforming in all but six indicators Benchmark: JCAHO National Data

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Healthy patients. Healthy hospitals. How / why are hospitals improving? P4P?

© 2005 Premier, Inc. 24 Rapid Improvement Portal

© 2005 Premier, Inc. 25 Rapid Improvement Guides

© 2005 Premier, Inc. 26 Premier Rapid Improvement Guides Best practices from HQI project top performers  Leadership and Performance Improvement Infrastructure  Improving Acute Myocardial Infarction (AMI) Care  Improving Coronary Artery Bypass Graft (CABG) Care  Improving Heart Failure Care  Improving Hip & Knee Replacement Care  Improving Pneumonia Care

© 2005 Premier, Inc. 27 The “How’s” “Quality” core value of institution Priority of executive team Physician engagement Improvement methodology Prioritization methodology Dedicated resources Committed “knowledge transfer”

© 2005 Premier, Inc om Web Site Screenshot Here Care Management Collaborative CMS Teams Coming Soon Nursing Collaborative: Nurse Agency Reduction Click Here Welcome – Building a Unified Bon Secours Health System requires sharing and helping one other through the latest technology tools and working smarter. This Web service is an initial pilot for a new service to support sharing across BSHSI using online tools and…. Knowledge & Best Practice Transfer Website Care Management Online Collaborative and Team site under development

© 2005 Premier, Inc. 29 Catholic Health Partners Participants Versus Non-Participants

© 2005 Premier, Inc. 30 Comparing overall composite score w/ “all-or-nothing” score One large health system

© 2005 Premier, Inc. 31 “Best Performer” – AMI How: “Bundles”

© 2005 Premier, Inc. 32 For More Information Stephanie Alexander