1. Effective Clinical Incentives: Improving Quality and Efficiency
Integrated Healthcare Association
February 8, 2006
Margaret E. O’Kane
President, NCQA
Welcome, excited about 9th annual SOHC report
Thanks for coming
I’d like to acknowledge staff that worked to pull this report together, not by name b/c there are too many, but in particular the Research, Data Collection and Communications departments
Introductions:
Dr. Bernadine Healy, Health Editor, US News & former head of Red Cross
Glenn Hackbarth, Chairman of MedPAC, group that advises Medicare on payment issues
Dr. Elliott Fisher, Dartmouth, extensive research into causes, consequences and extent of variation across the country
Dr. John Little, CMO, BCBS of SC, whose plan now pays doctors $5,000 for earning NCQA/ADA Diabetes Physician Recognition.

2. Today’s Presentation The need for clinical incentives
Quality measurement leads to quality improvement
Using payment to drive quality
Using quality to drive efficiency

3. What is the Health Care System Supposed to Do?
Health care spending
Healthy/
Low Risk
At-Risk
High
Risk
Early
Symptoms
Active
Disease
20% of people
generate
80% of costs
It’s easy to oversimplify an answer to this question
System should do more than make you better
System should prevent illness, diagnose early, etc.
System should work for everyone to keep them to the left
Explain chart
Note where we’re spending all our money
That’s not a system based on value
A value-based health care system
Source: HealthPartners

4. The System Rewards Volume, Not Effective, Efficient Care
Performance incentives
still gaining
traction
Current incentives favor overtreatment
Thank you Dr. McClellan
We appreciate your participation
This is our agenda
First, some context. How is the system supposed to work?
Second, good news -- accountable MCOs improved
Fifth straight years of gains
Gains bigger than ever
More good news -- new measures:
Results aren’t as important here as the fact that we’re measuring in these areas
The bad news: quality gaps remain
This refers to the system as a whole, not managed care
Finally, solutions -- two in particular: P4P and system-wide measurement

5. Measurement Leads to Improvement: Selected HEDIS Measures, 1999 – 2004
Average Increase:
52% over 5 years

6. Only 21.5% of Americans Enrolled in Accountable Plans
64.5 million (21.5%) enrolled in plans that report HEDIS data
185 million (63.5%)
enrolled in
systems
that do not
report HEDIS data
4.5 million
fewer than 2003
The blue section is what we’re reporting on with US News in the America’s Best Health Plans Ranking
Growth in grey unaccountable sector comes at the expense of accountable blue sector
Right now, it’s unclear whether CDHPs and PPOs will evolve to become a force driving quality.
46 million (15%) without insurance
few PPOs
no HDHPs
no “FFS” Medicare

7. Enrollment Trends HMO/POS, PPO, and Fee for Service 1988-2005
Market Share (% of covered workers)
More detail on where accountability is going (see purple line)
CDHPs aren’t captured here b/c they’re still a very small part of the market (<1%), but growing very fast and not yet accountable
Kaiser Family Foundation, 2005 Employer Health Benefits Survey

8. NCQA Physician Recognition Programs

9. Many Uses for Physician Recognition Programs
Health plans show seals in Provider Directory
Aetna
CIGNA
GeoAccess
Humana
Medical Mutual (OH)
United
Help practices with data collection
Blue Care Network (MI)
BTE (KY, MA, OH, NY)
Oxford (NY)
United (4 areas)
Pay rewards and/or applications fees to recognized MDs
Anthem (VA)
Blue Care Network (MI)
BTE (KY, MA, NY, OH)
CareFirst (DC-MD-VA)
ConnectiCare
HealthAmerica (PA)
Oxford (NY)
First Care (FL)
Actively steer patients to recognized MDs
BTE (KY, OH)
Oxford (NY)
Use for network entry
Aetna, CIGNA
Make all type black, or dark blue so it shows.
Fix the seals so they are round.

10. Forthcoming Recognition Programs
Spine Care
Oncology (with ASCO)
Advanced Primary Care

11. Opportunities to Improve Efficiency
Today:
Decrease underuse – prioritize to ROI
Decrease medical errors
Decrease overuse – begin with outliers/reform payment
Test new models to reward careful stewardship of resources, be vigilant about underservice
Re: the mission -- “Everywhere” might sound ambitious, but it just indicates that we’re thinking ahead. Right now we’re just in the U.S. . Note: some people think measuring and reporting on quality is our mission, but the truth is that that’s just a means to an end. The end is quality and achieving quality is our mission.
Re: the vision -- so how do we achieve our mission? By measuring and reporting and becoming the most widely trusted source of information about HC quality improvement.

12. Opportunities to Improve Efficiency
Tomorrow:
Increase patient engagement in self-care
A robust cross-specialty guidelines process
Public-private technology assessment process
Shared decision-making
A comprehensive payment reform strategy

13. Payment Reform: A Modest Proposal
Today:
Stop paying for medical errors
Monitor practice patterns and deal with outliers
Tomorrow:
Create true incentives for quality, safety and efficiency for providers and patients
Disallow perverse incentives for physicians and hospitals to overuse drugs/devices (e.g., cancer drugs, biologicals, or preferentially using certain brands) or procedures

14. We Need Clinically Accountable Entities
Medical Home:
Complex pediatrics
Geriatrics
Cancer
HIV
Coordinated group practice
High performance network
Hospital-centered network
Care management

15. Measuring Clinical Efficiency: Suggested Principles
Measure Value - not quality or costs alone, but both.
Measures must be methodologically sound, usable and feasible
Comparisons must be fair; risk adjustment plays a role
Place accountability at the level of the system where it wields influence—and can be influenced.
Measurement itself must also be accountable; methodology should be in the public domain
Practice makes perfect! Measures should be quick to implement and account for improvement over time
Maximize data availability, minimize expense and measurement burden: use electronic data where possible

16. Summary We are facing a cost and quality crisis
We need to think hard about a strategy for addressing both
P4P can help improve quality, efficiency
But comprehensive payment reform is essential