1. MARGARET E. O’KANE OCTOBER 20, 2008 A STRATEGIC APPROACH TO IMPLEMENTING HEALTHCARE INCENTIVES

2. 2 MARGARET E. O’KANE OCTOBER 20, 2008 ABOUT TODAY’S PRESENTATION NCQA: A Brief Introduction What, How, and Why We Measure Our Experience with P4P The Need for Comprehensive Payment Reform Recommendations

3. 3 MARGARET E. O’KANE OCTOBER 20, 2008 NCQA: A BRIEF INTRODUCTION Private, independent non-profit health care quality oversight organization founded in 1990 Mission: To improve the quality of health care Committed to measurement, transparency and accountability Unites diverse groups around common goal: improving health care quality

4. 4 MARGARET E. O’KANE OCTOBER 20, 2008 WHAT DO WE MEASURE? HEDIS ® –Cancer screening, diabetes, cardiac care –Measures of effective, appropriate care –Address prevention, chronic care –Specifications vetted by health care stakeholders, thought leaders –Results are rigorously audited CAHPS ® –Access, timeliness, satisfaction –Independently collected 106 million Americans are enrolled in a plan that reports HEDIS/CAHPS

5. 5 MARGARET E. O’KANE OCTOBER 20, 2008 Health Plans – HEDIS and CAHPS quality measurement – 2/3 of HMOs in U.S. are NCQA Accredited Covering 75% of HMO lives – Only Accreditation program that scores programs on quality of care – 2008: NCQA extends many MCO Accreditation requirements to PPOs Physicians/physician groups – HEDIS for Physician Measurement – NCQA Physician Recognition programs WHAT DO WE MEASURE?

6. 6 MARGARET E. O’KANE OCTOBER 20, 2008 IN THE BEGINNING... Quality was widely assumed to be high Measurement thought of as a novelty Health plans went first – Employer demand, threat of regulation were key Provider resistance was strong Performance gaps revealed Quality improvement efforts launched Patient safety story unfolded Notion of ‘cost/quality tradeoff’ exploded

7. 7 MARGARET E. O’KANE OCTOBER 20, 2008 MEASUREMENT DRIVES IMPROVEMENT Denotes measure specification change

8. 8 MARGARET E. O’KANE OCTOBER 20, 2008 National average: 62.6% BETA-BLOCKER TREATMENT AFTER A HEART ATTACK 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Each of these dots is a health plan. Note the variability from plan to plan.

9. 9 MARGARET E. O’KANE OCTOBER 20, 2008 : 97.7% BETA-BLOCKER TREATMENT AFTER A HEART ATTACK 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

10. 10 MARGARET E. O’KANE OCTOBER 20, 2008 APPLYING MEASUREMENT TO FINANCIAL INCENTIVES: NCQA’S EXPERIENCE WITH P4P

11. 11 MARGARET E. O’KANE OCTOBER 20, 2008 PHYSICIAN-LEVEL P4P PROGRAMS ARE GAINING TRACTION Source: MedVantage * * estimate

12. 12 MARGARET E. O’KANE OCTOBER 20, 2008 NCQA PHYSICIAN RECOGNITION PROGRAMS Identifies providers who deliver superior care More than 11,000 physicians Recognized to date Measure against evidence-based standards Assess care for diabetes, heart/stroke, back pain, care delivery systems New PPC-PCMH program serves to identify practices as “medical homes”

13. 13 MARGARET E. O’KANE OCTOBER 20, 2008 HOW NCQA RECOGNITION PROGRAMS WORK Evidence-based measures Voluntary Practice self-assesses and collects data Practice submits documentation to NCQA NCQA reviews, scores & audits submissions NCQA reports Recognized physicians on website and licenses list to others

14. 14 MARGARET E. O’KANE OCTOBER 20, 2008 MANY PRIVATE P4P EFFORTS BUILD ON NCQA RECOGNITION PROGRAMS Integrated Healthcare Association P4P (Calif.) Bridges to Excellence (19 states) Health plans

15. 15 MARGARET E. O’KANE OCTOBER 20, 2008 HOW IS RECOGNITION USED? Direct Financial Incentives Network Entry Active steering to Recognized MDs Recognition in Provider Directories Data Collection assistance

16. 16 MARGARET E. O’KANE OCTOBER 20, 2008 THE NEED FOR COMPREHENSIVE PAYMENT REFORM

17. 17 MARGARET E. O’KANE OCTOBER 20, 2008 “The rate at which health care costs grow is the central determinant of our long-term fiscal future.” --CBO Director Peter Orszag September 25, 2007

18. 18 MARGARET E. O’KANE OCTOBER 20, 2008 WE CAN’T AFFORD TO THINK SMALL: INCENTIVES FOR OVERUSE STILL SWAMP THE SYSTEM

19. 19 MARGARET E. O’KANE OCTOBER 20, 2008 P4P IS JUST THE FIRST STEP Incentives are not strong compared to underlying payment system While gaining traction, penetration remains limited Programs target primary care, but few exist for specialty care

20. 20 MARGARET E. O’KANE OCTOBER 20, 2008 P4P: FIRST-GENERATION INCENTIVE REALIGNMENT Different solutions are needed for different local conditions Population/risk adjustments necessary Paying for achievement vs. improvement: it can’t be an either-or proposition Aggregation of physicians does not necessarily equal integration Incentives for QI need to be clear

21. 21 MARGARET E. O’KANE OCTOBER 20, 2008 INCENTIVES MUST ALIGN WITH THE INTERESTS OF THE PATIENT AND SOCIETY A value-based health care system 20% of people generate 80% of costs Healthy/ Low Risk At- Risk High Risk Active Disease Health care spending Early Symptoms Source: HealthPartners

22. 22 MARGARET E. O’KANE OCTOBER 20, 2008 THOSE INTERESTS ARE... Patients: – The right care at the right time – Good health – Good health care – Affordable, accessible health care Society: – The right care at the right time – Healthy, productive citizens – Predictable, affordable care

23. 23 MARGARET E. O’KANE OCTOBER 20, 2008 NOT PAYING FOR THE WRONG CARE: A PLACE TO START Public, private payors increasingly refuse to pay for “never events” – E.g. wrong-side surgery, mismatched blood transfusions, severe pressure ulcer Aligns payment incentives with patient safety interests Signals that bad care won’t be rewarded

24. 24 MARGARET E. O’KANE OCTOBER 20, 2008 THE NEED FOR ACCOUNTABLE ENTITIES

25. 25 MARGARET E. O’KANE OCTOBER 20, 2008 CHANGING OUR APPROACH Up to now, P4P has been structured around specific measures – Result: improvement on specific measures More meaningful reforms address: – Delivery systems – IT adoption – “Planned care” Addressed by the Patient-Centered Medical Home

26. 26 MARGARET E. O’KANE OCTOBER 20, 2008 MEDICARE BENEFICIARIES WITH CHRONIC CONDITIONS SEE AN AVERAGE OF SEVEN DOCTORS Dx Tx Rx Tx Rx Dx Rx Dx Tx Rx Tx Rx Dx Tx Rx Dx Tx …confusing, dangerous gaps in care often result.

27. 27 MARGARET E. O’KANE OCTOBER 20, 2008 WHO’S IN CHARGE HERE? ?

28. 28 MARGARET E. O’KANE OCTOBER 20, 2008 CLINICALLY ACCOUNTABLE ENTITIES Medical Home – Primary care – Specialty care (for select conditions) Coordinated group practice Hospital-centered network Other integrated, accountable systems

29. 29 MARGARET E. O’KANE OCTOBER 20, 2008 ALTERNATIVE DELIVERY SYSTEMS AND ACCOUNTABLE MODELS Medical Home Specialty Care Hospital Care Accountable Clinical Entity PCP Specialists Hospital Patient, provider incentives most easily aligned here

30. 30 MARGARET E. O’KANE OCTOBER 20, 2008 THE MEDICAL HOME: POSSIBLE LIMITATIONS Highly coordinated care is a team sport – Marrying the medical home to the specialist side needs to be more fully fleshed out – Fully maximizing the promise of this model requires broad IT adoption, benchmarking: this goes beyond practice-level initiatives The ‘buzzword’ trap must be avoided; practices must be held to clear standards of what is and isn’t a medical home

31. 31 MARGARET E. O’KANE OCTOBER 20, 2008 CHALLENGES TO INCENTIVES IN THE CURRENT DELIVERY SYSTEM Fragmented care results in gaps in care because of gaps in accountability Simply aggregating physicians does not make for an integrated delivery system Larger group practices allow for integration of primary, specialty care into larger units of accountability

32. 32 MARGARET E. O’KANE OCTOBER 20, 2008 COMPREHENSIVE PAYMENT REFORM NEEDED Revisit capitation / payment bundling – There is far more transparency now than 10 years ago – Public understands more about quality measurement – Some incentives make sense – Area of caution: physician backlash Policymakers are taking note – Medicare: Implemented demonstration programs on medical homes (8 states), group practices – Several state initiatives underway, notably including North Carolina’s Medicaid medical home program

33. 33 MARGARET E. O’KANE OCTOBER 20, 2008 HOW DO WE GET TO VALUE (MISS.)? Value Payments must be substantial to counteract massive incentives favoring overuse But micromanaging incentives doesn’t work Setting a destination and allowing providers to solve for efficiency allows creativity to come into play

34. 34 MARGARET E. O’KANE OCTOBER 20, 2008 INCENTIVES MUST ALIGN WITH THE INTERESTS OF PATIENTS, SOCIETY A value-based health care system 20% of people generate 80% of costs Healthy/ Low Risk At- Risk High Risk Active Disease Health care spending Early Symptoms Source: HealthPartners

35. 35 MARGARET E. O’KANE OCTOBER 20, 2008 DISCUSSION