1. The Cost-Quality Connection in Southeast Michigan A Call for Consistency in Performance-Based Differential Reimbursement John E. Billi, MD University of Michigan jbilli@umich.edu June 2004, GDAHC Annual Meeting

2. Relationships Among Cost, Quality, and Safety Poor quality and safety problems increase costs: –complications, hospital acquired infections, longer LOS, extra ER visits, re-admissions, re-operations, extra office visits, extra drugs Problems in cost, quality, & safety have similar root causes. –One cause is inappropriate variation in clinical practice (clinicians, pharmacists, hospitals…) Problems in cost, quality, & safety have similar a solution: evidence-based medicine –eliminate variation through evidence-based practice guidelines nested in a continuous quality improvement model. –Can help underuse, overuse, and misuse –In Lean language, it is the endless pursuit of waste and its transformation into value for patients and those who fund care

3. A Brief History of Performance Based Contracting in Southeast Michigan None Several Many ?Too many –Variable diseases –Variable guidelines and measures –Variable financial impact Need to move to one coordinated model: performance-based differential reimbursement

4. IOM: Crossing the Quality Chasm Agenda for Redesigning 21st Century Healthcare System All constituencies commit: Policymakers, purchasers, regulators, health professionals, trustees, management, consumers, educators HHS identify first priority conditions and provide resources to stimulate change Organizations support change Constituents foster and reward improvement Create infrastructure to support evidence-based medicine Facilitate use of information technology Align payment incentives Prepare workforce

5. Challenges to Community- Wide Quality Improvement Dueling Guidelines: from payers & national orgs. Dueling Profiles: from many payers Dueling QI Interventions: payers, MPRO, group practices, health systems Dueling Formularies: payers/PBMs, employers, Caid Disease of the Month: new QI initiatives every month distract physicians, hospitals, systems Limits of claims data: my patients are different Dueling incentive programs, each without critical mass – easier to ignore than to develop systems to comply

6. Current State of Performance-based Differential Reimbursement Medicaid: Qualified Health Plan incentives Medicare Hospital Incentive Program BCBSM –Hospital Incentive Program –Multihospital QI programs BMC2 - percutaneous coronary intervention –Pharmacy incentive program –Physician Group Incentive Program NBCH RFI for Health Plans Health Plan-specific incentives –DM, asthma, immunizations, lead levels, beta blockers, –MCARE, HAP, Care Choices, HPM… some overlap, many differences CMS Medicare Demonstration and Pilot Projects

7. A Prototype for Performance- Based Differential Reimbursement Blue Cross of Michigan Cardiac Consortium (BMC2) –Multihospital, evidence-based, data driven QI –Funded through BCBSM PPO hospital payments –All cath lab data collected reliably and accurately –Analyzed, blinded, reviewed together by cath lab heads –Interventions and re-measurement –Most common complication from cath was reduced – no longer the most common! –More clinical conditions can be managed this way Breast, CABG, surgery quality…

8. Coordinated Quality Improvement Employers, payers, hospitals and physicians agree to pursue –Common diseases (MI, diabetes) –Common evidence-based guidelines (GAP, NQF, MQIC) –Common metrics (beta blocker, retinal screening) –Common measurement process (claims, definitions…) –Common all-payer profiles Actionable, doctor-specific, patient-specific reports –Coordinated quality improvement efforts (MQIC, MPRO) –Consistent differential reimbursement for measurement and performance – for the same diseases and metrics Physicians and hospitals can focus to do it once, right!

9. Next steps GDAHC endorse the Future Directions Initiative Employers and health plans commit to back: –coordinated quality improvement –coordinated incentive programs Employers, insurers, hospitals and physicians agree on medical conditions, guidelines, measures, and overall incentive model Invite other stakeholders (Medicaid, State, Medicare) Add/emphasize appropriateness, not just quality

10. Quality Initiatives in SEM - The Panel Tom Simmer, MD, BCBSM Greg Pane, MD, HFHS Edward Working, Detroit Regional Chamber Discussion