1. PHC4 - “Pay for Performance” Toolkit Mike Berney Community and Purchaser Relations Manager Pennsylvania Health Care Cost Containment Council ALPHA BENEFITS – Apr. 11, 2007

2. Pennsylvania Health Care Cost Containment Council (PHC4) Who is Mike Berney? chocolate lover chocolate lover health care guy health care guy family and community guy … family and community guy … “I’m from the state government, and I’m here to help you …” “I’m from the state government, and I’m here to help you …”

3. Today some health care execs and politicians talk about consumer empowerment, responsibility, and transparency

4. REALLY? Where’s the information on cost and quality coming from??

5. HOW ABOUT FREE PUBLIC REPORTS HOW ABOUT FREE PUBLIC REPORTS

6. Pennsylvania Health Care Cost Containment Council (PHC4) Welcome to PHC4 Independent state agency established 1986 Independent state agency established 1986 25-Member Board 25-Member Board About 50 employees About 50 employees $4 million annual budget $4 million annual budget

7. Pennsylvania Health Care Cost Containment Council (PHC4) PHC4 Mission Improve the quality and restrain the cost of health care Improve the quality and restrain the cost of health care Promote competition in the health care marketplace Promote competition in the health care marketplace

8. Pennsylvania Health Care Cost Containment Council (PHC4) PHC4 – Governing Board Purchasers Purchasers 6 Business 6 Business 6 Labor 6 Labor 1 Consumer 1 Consumer Insurers Insurers 1 Commercial 1 Commercial 1 Non-Profit (Blues) 1 Non-Profit (Blues) 1 HMO 1 HMO Providers Providers 2 Hospitals 2 Hospitals 2 Physicians 2 Physicians 1 Nurse 1 Nurse 1 Health Care Quality Improvement Expert 1 Health Care Quality Improvement Expert State Government State Government Secretary of Health Secretary of Health Secretary of Welfare Secretary of Welfare Insurance Commissioner Insurance Commissioner

9. Pennsylvania Health Care Cost Containment Council (PHC4) PHC4 data 4 million inpatient and outpatient- ambulatory records annually. 4 million inpatient and outpatient- ambulatory records annually. All 176 General Acute Care hospitals All 176 General Acute Care hospitals

10. Useful tool: Data is “Severity Adjusted”

11. Pennsylvania Health Care Cost Containment Council (PHC4) What’s severity-adjusted mean? Accounts for differences in patient risk factors and illness levels. Accounts for differences in patient risk factors and illness levels. Hospitals treating a higher percentage of very sick patients or complex cases are not penalized for doing so. Hospitals treating a higher percentage of very sick patients or complex cases are not penalized for doing so. Applies to outcomes data. Applies to outcomes data.

12. Pennsylvania Health Care Cost Containment Council (PHC4) PHC4 Toolkit (public reports)  Hospital Performance  Financial Analysis  Heart Bypass (CABG) **  Hip & Knee **  Diabetes Hospitalization ** includes surgeon-specific info ** includes surgeon-specific info All are free to the public

13. Useful Web tools www.phc4.org

14. Pennsylvania Health Care Cost Containment Council (PHC4) PHC4 Web-based tools PHC4 Research Briefs ( examining topics ) PHC4 FYI – purchaser-focused (short topic papers) (short topic papers)

15. Pennsylvania Health Care Cost Containment Council (PHC4) PHC4 Free Tools available to the public Hospital Performance Report Hospital Performance Report Online and hard copies If your employees or colleagues need a hospital procedure … our tools can help

16. Pennsylvania Health Care Cost Containment Council (PHC4) Hospital Performance Report Three regional versions of this tool promote competition in the marketplace Three regional versions of this tool promote competition in the marketplace

17. Pennsylvania Health Care Cost Containment Council (PHC4) PHC4 Hospital Performance Report Outcome data for 30 treatment categories Outcome data for 30 treatment categories Quarterly online updates for 49 treatment categories Quarterly online updates for 49 treatment categories

18. Pennsylvania Health Care Cost Containment Council (PHC4) Hospital Performance Report Resource to purchasers, providers, insurers, researchers and the public Compares hospitals to HOW WELL THEY SHOULD PERFORM on cost and QUALITY by treatment and procedure

19. Pennsylvania Health Care Cost Containment Council (PHC4) Hospital Performance Report An employer recently used PHC4 data to review charges at a regional medical center for specific procedures An employer recently used PHC4 data to review charges at a regional medical center for specific procedures

20. Pennsylvania Health Care Cost Containment Council (PHC4) Data Use The employer studied the PHC4 data and determined that the average charge for a procedure at the medical center soared from $5,403 in 2000 to $18,988 in 2004. The employer studied the PHC4 data and determined that the average charge for a procedure at the medical center soared from $5,403 in 2000 to $18,988 in 2004. HC Purchasers – large and small orgs - used the data in negotiations HC Purchasers – large and small orgs - used the data in negotiations

21. Pennsylvania Health Care Cost Containment Council (PHC4) Our Free Tools available to the public Publish hospital outcomes Publish hospital outcomes Publish hospital financials Publish hospital financials

22. Pennsylvania Health Care Cost Containment Council (PHC4) PHC4’s Financial Analysis GAC Volume One GAC Volume One Non-GAC Volume Two Non-GAC Volume Two

23. Pennsylvania Health Care Cost Containment Council (PHC4) PHC4 Hospital Financial Analysis ‘05 For 176 PA GAC Hospitals for FY 05 Total Charges = $92.5 Billion Total Payments (net patient REVENUES) = $25.9 Billion Hospitals receive about 29 cents on the dollar ( 29 % of billed amount )

24. Pennsylvania Health Care Cost Containment Council (PHC4) It shouldn’t surprise us to see this data: Increase in PA-Licensed Surgery Centers May 1995 May 2005 May 1995 May 2005 46 177

25. Pennsylvania Health Care Cost Containment Council (PHC4) Heart surgeries PHC4 data collected since 1996 shows: PHC4 data collected since 1996 shows: # of coronary artery surgeries # of coronary artery surgeries declined by – 17 % # of open-heart surgery units # of open-heart surgery units increased by + 41 %

26. Pennsylvania Health Care Cost Containment Council (PHC4) Total GAC Hospital Charges

27. Pennsylvania Health Care Cost Containment Council (PHC4) First Of Its Kind Tool Physician-Specific Hip & Knee Report Readmissions due to complications resulted in $35 million in hospital charges & 7,700 additional hospital days.

28. Pennsylvania Health Care Cost Containment Council (PHC4) PHC4 Research Briefs – Examine health care topics relevant to public policy and public interest

29. Pennsylvania Health Care Cost Containment Council (PHC4) PHC4 Research Brief – MRSA in Pennsylvania Hospitals In 2004; there were 13,722 hospitalizations in PA in which the patient had a MRSA infection. That is 7.4 per every 1,000 patients MRSA = Staph Infection

30. DOES PUBLIC REPORTING WORK? Some say no Some say yes

31. Pennsylvania Health Care Cost Containment Council (PHC4) Patrick J. Brennan, head of a panel named by the secretary of Health and Human Services years ago to advise the CDC on infection issues – while not taking a position on mandatory public reporting of infection rates –said: “There is no evidence to support public disclosure as a means to reduce the incidence of these infections.” Letter to the Editor - Marc P. Volavka, Executive Director, PHC4 “Unfortunately, Dr. Brennan was only half right. There is no evidence to support public disclosure because public disclosure of hospital-acquired infection has never occurred.” February 1, 2005

32. Pennsylvania Health Care Cost Containment Council (PHC4) ANOTHER RESEARCH BRIEF HOSPITAL ACQUIRED INFECTIONS HOSPITAL ACQUIRED INFECTIONS