Effective Clinical Incentives: Improving Quality and Efficiency Integrated Healthcare Association February 8, 2006 Margaret E. O’Kane President, NCQA Welcome, excited about 9th annual SOHC report Thanks for coming I’d like to acknowledge staff that worked to pull this report together, not by name b/c there are too many, but in particular the Research, Data Collection and Communications departments Introductions: Dr. Bernadine Healy, Health Editor, US News & former head of Red Cross Glenn Hackbarth, Chairman of MedPAC, group that advises Medicare on payment issues Dr. Elliott Fisher, Dartmouth, extensive research into causes, consequences and extent of variation across the country Dr. John Little, CMO, BCBS of SC, whose plan now pays doctors $5,000 for earning NCQA/ADA Diabetes Physician Recognition.

Today’s Presentation The need for clinical incentives Quality measurement leads to quality improvement Using payment to drive quality Using quality to drive efficiency

What is the Health Care System Supposed to Do? Health care spending Healthy/ Low Risk At-Risk High Risk Early Symptoms Active Disease 20% of people generate 80% of costs It’s easy to oversimplify an answer to this question System should do more than make you better System should prevent illness, diagnose early, etc. System should work for everyone to keep them to the left Explain chart Note where we’re spending all our money That’s not a system based on value A value-based health care system Source: HealthPartners

The System Rewards Volume, Not Effective, Efficient Care Performance incentives still gaining traction Current incentives favor overtreatment Thank you Dr. McClellan We appreciate your participation This is our agenda First, some context. How is the system supposed to work? Second, good news -- accountable MCOs improved Fifth straight years of gains Gains bigger than ever More good news -- new measures: Results aren’t as important here as the fact that we’re measuring in these areas The bad news: quality gaps remain This refers to the system as a whole, not managed care Finally, solutions -- two in particular: P4P and system-wide measurement

Measurement Leads to Improvement: Selected HEDIS Measures, 1999 – 2004 Average Increase: 52% over 5 years

Only 21.5% of Americans Enrolled in Accountable Plans 64.5 million (21.5%) enrolled in plans that report HEDIS data 185 million (63.5%) enrolled in systems that do not report HEDIS data 4.5 million fewer than 2003 The blue section is what we’re reporting on with US News in the America’s Best Health Plans Ranking Growth in grey unaccountable sector comes at the expense of accountable blue sector Right now, it’s unclear whether CDHPs and PPOs will evolve to become a force driving quality. 46 million (15%) without insurance few PPOs no HDHPs no “FFS” Medicare

Enrollment Trends HMO/POS, PPO, and Fee for Service 1988-2005 Market Share (% of covered workers) More detail on where accountability is going (see purple line) CDHPs aren’t captured here b/c they’re still a very small part of the market (<1%), but growing very fast and not yet accountable Kaiser Family Foundation, 2005 Employer Health Benefits Survey

NCQA Physician Recognition Programs

Many Uses for Physician Recognition Programs Health plans show seals in Provider Directory Aetna CIGNA GeoAccess Humana Medical Mutual (OH) United Help practices with data collection Blue Care Network (MI) BTE (KY, MA, OH, NY) Oxford (NY) United (4 areas) Pay rewards and/or applications fees to recognized MDs Anthem (VA) Blue Care Network (MI) BTE (KY, MA, NY, OH) CareFirst (DC-MD-VA) ConnectiCare HealthAmerica (PA) Oxford (NY) First Care (FL) Actively steer patients to recognized MDs BTE (KY, OH) Oxford (NY) Use for network entry Aetna, CIGNA Make all type black, or dark blue so it shows. Fix the seals so they are round.

Forthcoming Recognition Programs Spine Care Oncology (with ASCO) Advanced Primary Care

Opportunities to Improve Efficiency Today: Decrease underuse – prioritize to ROI Decrease medical errors Decrease overuse – begin with outliers/reform payment Test new models to reward careful stewardship of resources, be vigilant about underservice Re: the mission -- “Everywhere” might sound ambitious, but it just indicates that we’re thinking ahead. Right now we’re just in the U.S. . Note: some people think measuring and reporting on quality is our mission, but the truth is that that’s just a means to an end. The end is quality and achieving quality is our mission. Re: the vision -- so how do we achieve our mission? By measuring and reporting and becoming the most widely trusted source of information about HC quality improvement.

Opportunities to Improve Efficiency Tomorrow: Increase patient engagement in self-care A robust cross-specialty guidelines process Public-private technology assessment process Shared decision-making A comprehensive payment reform strategy

Payment Reform: A Modest Proposal Today: Stop paying for medical errors Monitor practice patterns and deal with outliers Tomorrow: Create true incentives for quality, safety and efficiency for providers and patients Disallow perverse incentives for physicians and hospitals to overuse drugs/devices (e.g., cancer drugs, biologicals, or preferentially using certain brands) or procedures

We Need Clinically Accountable Entities Medical Home: Complex pediatrics Geriatrics Cancer HIV Coordinated group practice High performance network Hospital-centered network Care management

Measuring Clinical Efficiency: Suggested Principles Measure Value - not quality or costs alone, but both. Measures must be methodologically sound, usable and feasible Comparisons must be fair; risk adjustment plays a role Place accountability at the level of the system where it wields influence—and can be influenced. Measurement itself must also be accountable; methodology should be in the public domain Practice makes perfect! Measures should be quick to implement and account for improvement over time Maximize data availability, minimize expense and measurement burden: use electronic data where possible

Summary We are facing a cost and quality crisis We need to think hard about a strategy for addressing both P4P can help improve quality, efficiency But comprehensive payment reform is essential