Quality and Costs: A Twisted Relationship L. Gregory Pawlson MD, MPH, FACP Executive Vice President NCQA

Costs are and have been increasing at an UNSUSTANABLE rate

Long Term Health Cost Trends Healthcare Costs as a PERCENTAGE of GDP

Quality is not so great either!

Growing Evidence that Value of Health Care is Far from Optimal The “old” RAND study- lack of relationship between volume and appropriateness (Brook et al) Patient safety studies-up to 100,000 hospital deaths due to errors and avoidable complications (Brennan, IOM) Evidence from current measurement: less than 50% of diabetes, hypertension or asthma treated optimally with existing medications (McGlynn et al)

Growing Evidence that Value of Health Care is Far from Optimal Documentation of wide variation in rates of use of treatments and lack of relationship between quality and quantity of services (Wennberg et al) Over 25,000 deaths avoided each year if under treatment level raised to achievable benchmarks (90% tile of highest performing health plans) (Eddy-Archimedes, NCQA State of Health Care)

Summary of Findings There are substantial opportunities for improved care Appropriateness and volume of services do not appear to be closely related Rate of increase of costs IS a problem that should concern everyone Quality and the quantity of services and cost of care provided do not appear to have simple direct relationship (? Inverse at this point)

What should a “value based” Health Care Do? A value-based health care system 20% of people generate 80% of costs A: Move people from “Right to Left” —and keep them there Healthy/ Low Risk At- Risk High Risk Severe Disease Current Health Care Spending Early Symptoms Source: HealthPartners Ideal Spending

Challenge: What do we know about the relationship of cost and quality-and what can we do to optimize value?