Measuring and Rewarding Physician Performance: A National Movement David S. P. Hopkins, Ph.D. Pacific Business Group on Health Provider Reimbursement Web Summit June 16-27, 2003

2 of 18 About the Pacific Business Group on Health  PBGH’s 47 major purchasers represent 3 million employees, retirees and their families and billions of dollars in annual health care expenditures  PBGH operates PacAdvantage (formerly the Health Insurance Plan of California); doing joint purchasing on behalf of 14,500 small employers with 125,000 lives

3 of 18 Pacific Business Group on Health Members

4 of 18 Pacific Business Group on Health: Mission and Priorities  Quality Measurement and Improvement  Value Purchasing  Consumer Engagement Mission: To improve the quality and availability of health care while moderating costs.

5 of 18 Quality Measurement  Improvement  Increase the availability and usability of quality and economic efficiency performance information for all levels of care  Health Plans  Hospitals  Medical Group  Individual Physicians  Identify high impact methods to improve performance and create market demand for adoption by plans and providers through effective value purchasing and consumer engagement efforts

6 of 18 Value Purchasing  Enable purchasers to make value-based choices that promote efficient delivery and equitable access to high-quality care  Support improvements in accountability with regard to the delivery, purchasing and consumption of health care

7 of 18 Consumer Engagement  Encourage the use of performance information by consumers.  Make information available for every level of the health care system and provided in ways and at times consumers believe are relevant and critical to their needs  Use information to encourage value-based decision-making

8 of 18 Cost Trends Driving Purchasers to Care About Value & Look at Physician- Level Performance  Purchasers see need to “drill down” to provider level to maximize opportunity for quality/efficiency improvement  Clinical quality and efficiency varies widely at the provider level  Current payment system not rewarding superior provider value

9 of 18 Where Physician Performance Differentiation Needs Be Physicians (1) are rewarded for quality and efficiency, (2) have usable information for QI and (3) can make better informed referrals Physician groups have information to support pay-for-performance and QI Plans have a valid, standardized basis for identifying and rewarding high-value physicians and groups Employers have information for use in benefit design Consumers have information for use better informed decision-making

10 of 18 Physician Performance Measurement Framework  Patient experience  Quality of care  Efficiency of care  Office systems PBGH working to advance every level…

11 of 18 PBGH/Medical Group Patient Survey Pilot (2003) Purpose – Evaluate methods & value of brief survey of patients’ experiences with doctor Approach – Using medical group data files, survey patients about doctor experiences based on 1+ visits in last year Stakeholders – PBGH, California HealthCare Foundation & 500+ doctors from eight medical groups

12 of 18 Patient Survey Pilot -- Questions Being Answered Valid, Meaningful Measures – Can we identify measures that discriminate performance, have sound technical properties and are important to consumers? Affordable – Comparing web and phone based methods to mail -- are there less costly and valid routes? Actionable – Can physicians get meaningful information; can medical groups use results to improve process & behavior? – Are the survey results relevant to performance payment systems? – For the future – how best can the results be translated for consumers.

13 of 18 Physician Quality and Efficiency California Pilot Supported by PBGH member Quality Fund contributions and federal AHRQ “Partnerships for Quality” grant (4 years, $1.4M) Assess efficiency measures to be based on severity-adjusted episode analysis of claims data Assess quality measures to be based on claims data representation of evidence-based medicine (e.g., HEDIS) Scientific Advisory Board comprised of experts in physician evaluation methodology

14 of 18 Physician Quality and Efficiency Proof-of-Concept Pilot (2003) Develop and test efficiency measures for two specialties using sample claims data Identify best-in-class quality measurement vendor(s) Perform comparative analysis of data sources: — CMS — Health plan (PPO) — Employer Advance partnerships

15 of 18 Physician Performance Measurement -- Office Systems Link to existing efforts:  CMS Doctors Office Quality  NCQA/GE Physician Rewards Initiative  IHA Pay-for-Performance IT systems measures

16 of 18 Physician Performance -- Key Partnerships  CMS  Employers  Health Plans  Physician groups  State medical association  Consumer groups (e.g., AARP)  Other employer coalitions

17 of 18 “End Game” – Not if, but how fast… Physicians are (1) rewarded for quality and efficiency, (2) have usable information for QI and (3) can make better informed referrals Physician groups have information to support pay-for-performance and QI Plans have a valid, standardized basis for identifying and rewarding high-value physicians and groups Employers have information for use in benefit design Consumers have information for use better informed decision-making

18 of 18 To Learn More… overview of PBGH programs and initiatives Web site with health plan and provider quality measurements group purchasing pool demo.chooser.pbgh.org—assists in the selection of health plans and providers Diabetes CQI Project description and resources for plans  providers To subscribe to the PBGH E-Letter, go to