PAYMENT REFORM: THE QUALITY INCENTIVE PAYMENT SYSTEM Kenneth Goldblum, M.D.

Goals of P4P  Improve quality (but is this quality?)  Reduce costs (does it?)  Enhance physician income without incenting utilization  Serve as a check on utilization based reimbursement systems like ACO’s

Design Features  Can incent processes or outcomes or behaviors (pay for participation)  Can incent specific outcome measures but goals can be a moving target  Can incent performance relative to group  Can incent improvement  Can use thresholds or graded approaches  Can use single measures or composites  Adjustments for small numbers/ practice aggregation

Issues  What are the goals?  Payer designed or doctor designed?  How much of physician income is in play?  What fraction of patients are involved?  PCP versus specialist versus hospital  Risk adjustment  Patient demographics, allocation and other patient related issues  Transparency/use of results?

Unintended Consequences  Less emphasis on patient goals  Avoidance of high risk or non adherent patients  Excess focus on targeted measures to exclusion of other important care elements

RMMC  180 private practice Primary Care Doctor network in the four Philadelphia suburban counties in Pennsylvania.  Designed and administered our own P4P program since 2001  Component of an arrangement with a large payer that supports infrastructure and has sharing of cost savings as another component

RMMC Enhancement Program  Continues to evolve over time  Physician designed and administered  Goals are quality improvement, cost reduction, and physician income enhancement  Incents both processes and outcomes  Uses single and composite measures  Rising bars with approaching ceilings?

Program Supports  Organizational infrastructure  Patient support via telephone calls from RMMC nurses  Quality Improvement doctors in each practice  Physician peer mentoring  Learning Sessions for doctors and staff  Reimbursed regional physician meetings with data sharing  Web based tool for tracking and reporting

HMO DM CommerciaL – Nov 30, 2009

HMO DM Medicare – Nov 30, 2009

HMO CAD – Nov 30, 2009

Disease Population Commercial Total PMPM 16

Disease Population Medicare Total PMPM 17

Diabetes: Disease Population Commercial PMPM 18

Diabetes: Disease Population Medicare PMPM 19

Estimated RMMC Net Savings over Plan ( )

What Doctors Learn  Population Management  QI processes  Working in teams and using tools  Result sharing  Helping patients change their health behaviors

RMMC Conclusions  It is possible to change PCP behavior but it takes about a 10% reimbursement bump  Multiple avenues of support improve results  Physician ownership is key  The greater the degree of practice penetration the better  Improved care of patients with chronic illness lowers costs  No program is perfect but imperfect programs can still accomplish goals.

Whither P4P?  Less free standing payer based programs?  Certainly will be a component of PCMH  More transparency for government/consumer purposes  Specialist programs?

Reform and the ACO  Reimbursement reform to drive cost lowering is a safe assumption  My bet is that aligned incentives will prove the best route to cost control and ACO type integration will proliferate  To the extent that certain outcomes drive costs, there will be P4P within the ACO.  To the extent that the ACO will need to demonstrate quality, P4P will likely have a role