The Role of Private Purchasers in the Patient Safety Movement Leah Binder, CEO The Leapfrog Group

Act I. The Health Care System in Trouble

Costs Escalating Rapid escalation in cost (9-20+%/yr) Companies unable to absorb growing medical cost through product price increases Individual companies have limited purchasing power to effect change in system

Failures in the Quality and Safety of Care 30% of all direct health care costs are due to poor care –Misuse, under-use, overuse, and waste 2 –Poor quality care costs between $1,900 and $2,250 per covered employee year 2 Poor quality means lives lost and mistakes made –Up to 98,000 deaths/year due to medical mistakes 3 1 McGlynn et al Midwest Business Group on Health/Juran Institute Institute of Medicine 1999

Attempts at Reform Failing Managed Care and HMOs Demonized Clinton Reform Plan Demonized Modest efforts to publicly report data, compare hospitals, demonized

Act II. The Galvinized Employer

The way business leaders think Competition is good Value is good: Highest possible quality for the lowest possible cost You get what you pay for Results matter ROI matters Avoid the subprime Employees are our Number One Resource (and not just for the bottom line—we know these people and care about them)

The way healthcare expects business leaders to think Pay without regard to value Pay more when you get worse results Pay for as many services as we think are needed, not the results Pay regardless of ROI Pay the same for subprime as for conventional services Pay when we harm your employee through preventable mistakes

The Leapfrog Group Founded by Business Roundtable and other purchasers IOM Report of 1999 galvinizing force

Pillars for Improving Quality Standard Measurements & Practices Transparency Incentives & Rewards

Four Safety ‘Leaps’ and Beyond Four Leaps 1.Computer physician order entry (CPOE) 2.Staffing ICUs with intensivists 3.Evidence-based hospital referral (EHR) for patients needing high-risk care to hospitals with the best track record and experience 4.Safety Score of other National Quality Forum (NQF) -endorsed Safe Practices Beyond “Never events” policy Hospital acquired conditions

Leapfrog’s Regional Roll-Outs: Painting the USA Green Regions drive survey data collection: 1. Recognize hospitals for participation and good performance 2. Use various financial incentives and rewards to drive further improvements Regional Roll-Outs! (Regions in Green)

Leapfrog Hospital Rewards Program TM Off the shelf program for health plans to reward good performance on the Leapfrog Hospital Survey Program Goal is to motivate hospital quality improvement through recognition and rewards

Act III. Others Enter the Leapfrog Picture

Leapfrog Initiatives Become Mainstream Never events policies (CMS, health plans) Report cards/ Hospital Compare website P4P programs (200 and counting) Harmonizing of health plan measures

Sec. Leavitt’s Four Cornerstones to Promote Quality and Efficiency 1.Interoperable Health IT 2.Transparency of quality information based on standard measures 3.Transparency of price information 4.Incentives for high quality care Expands President’s Executive Order calling for federal purchasers (OPM, CMS, DoD) to use purchasing practices to promote these cornerstones

Act IV. Musings

What other incentives might work? Gainsharing with providers Copay and deductible differentials in benefits packages More profound reimbursement incentives

Will safety be a priority for the new administration? Employers will need to maintain sharp focus and advocacy

Will hospitals be able to stay in business? Must maintain standardization in measurement, transparency and aligned incentives Hospitals see only reduction in payments, not incentives

Curtain Call

Employer Role in the future Apply good business practices to healthcare purchasing Educate employees on making choices Work with other purchasers to advocate policy change Make demands Make it easier for performing hospitals to thrive Continue to reject excuses when it comes to the health and well-being of employees and their dependents