1. Achieving High-Quality, Low Cost Care Amidst Payment System Reform
Texas Hospital Association Annual Conference
February

2. Setting the stage High-Quality Payment System amidst Low –Cost Reform
Questions:
How are these terms defined? What are the different perspectives on those definitions?
How is cost calculated? What is included in the new era?
What is the goal of Payment System Reform?
What exactly are all the components related to quality within Healthcare Reform?

3. Thinking What we think and feel The options we see The choices we make
The results we get

4. Thinking differently about care
100%
Consider
perspectives
Provider
Payer
Patient
Focus on hospital based care
Quality and Cost
% of focus
Focus on Continuum of Care
Quality and Cost
20%
Year 5
Year 1
Time

5. Defining Cost and Quality
Low Quality
Low cost
High Quality
Low Cost
High Cost
Characteristics of
Low cost and high
Quality….
Safe, Efficient and
Effective care
Low
COST
High
High
Low
QUALITY

6. Components of Reform Goals Major Components
to incentivize towards high quality, low cost care
To reduce the overall spend of care
Major Components
Reward Better performing providers
Value Based Purchasing
Reducing payment for poor outcomes
Readmissions, hospital acquired conditions, infections, serious preventable adverse events
Encourage collaboration across the continuum
Bundling of payments

7. Quality Based Payment Reforms

8. Value Based Purchasing
FY 2013 Measures for VBP
Heart Attack – 3 measures
Heart Failure – 3 measures
Pneumonia – 4 measures
Healthcare Associated Infections – 4 measures
Surgical Care Improvement – 3 measures
Patient Experience of Care – HCAHPS (10 domains)

9. Value Based Purchasing
Calculation
Clinical measures account for 70% of score
HCAHPS will account for 30% of score
Levels of Performance
National median score = threshold
National top decile performance = benchmark
Below the median score = need to demonstrate improvement over baseline

10. Example

11. Example Calculation for VBP
Measure
Available Points
Actual points
AMI 30 20 HF PN 40
SCIP
HAI
Total Clinical Measures (*70%)
170
130
HCAHPS (*30%)
100 80
Grand Total
270
210

12. Quality Based Payment Reforms
Readmissions
Federal: PPACA imposes financial penalties on hospitals with high readmission rates.
Beginning October 2012, acute care hospitals with higher than expected 30 day risk adjusted readmission rates will receive reduced payments for every discharge. The reduced payment is the lesser of 1% or a hospital specific readmission adjusted factor. [2% in Oct 2013; 3% in Oct 2014]. CAHs exempt.
In the first two years, the payment policy will apply to heart attack, heart failure and pneumonia. Additional conditions will be added in future years.
Projected savings: $7.1 billion/10 years
Readmissions penalty is for Medicare hospitals

13. Quality Based Payment Reforms
CLABSI and SSI Reporting
Federal: To receive the annual payment update from CMS, hospitals are required to report:
January 2011: CLABSI. First quarter data must be submitted by August 15, 2011.
January 2012: SSI. First quarter data must be submitted by August 15, 2012.
State: Reporting of CLABSI and SSI expected September 2011
Reporting will be to the CDC’s National Healthcare Safety Network

14. Quality Based Payment Reforms
Readmission (cont.)
State: As per HB1218 (81st Session), Medicaid potentially preventable readmissions (PPR) data will be shared confidentially with hospitals.
A PPR means a return hospitalization of a person within a period specified by the commission that results from deficiencies in the care or treatment provided to the person during a previous hospital stay or from deficiencies in post-hospital discharge follow up. The term does not include a hospital readmission necessitated by the occurrence of unrelated events after the discharge.

15. Quality Based Payment Reforms
Hospital Acquired Conditions (HACs)
Federal: PPACA imposes financial penalties on hospitals with high HAC rate.
Beginning October 2014, hospitals with HAC rate in bottom quartile of national average (i.e. high rate) will suffer a 1% payment reduction for all Medicare inpatient DRGs.
Projected savings: $1.5 billion/10 years
Other HAC provision
Requires reporting of hospital specific information on HACs to the public via Hospital Compare
Public reporting was scheduled for September 23, 2010 but has been indefinitely delayed due to a discrepancy in the calculation of HAC rates by CMS.

16. New questions How can we continually improve on all the measures?
Where can we collaborate with others in the care of patients?
How can we be even more effective in achieving consistent outcomes?
Where do we start or how can we get even better as national performance improves?

17. Questions for the panel
And more……..