Using Incentives to Improve Quality in Health Care R. Adams Dudley, MD, MBA Professor of Medicine and Health Policy Philip R. Lee Institute for Health Policy Studies University of California, San Francisco Support: Agency for Healthcare Research and Quality, California Healthcare Foundation, Robert Wood Johnson Foundation Investigator Award Program Disclosures: none.

Outline of Talk Audience poll: In cardiology, on which measures of quality or efficiency should rewards be based? What do outsiders want to see measured & rewarded in cardiology? Is it all about reimbursement? Or are there other creative options purchasers have that might move the needle?

In cardiology, on which measures of quality or efficiency should rewards be based? Suggestions?:

How Would Outsiders Like to See Cardiology Measured? On efficiency (National Priorities Partnership): –Appropriateness of diagnostic procedures –Appropriateness of PCI On quality: outcomes (mortality, but also symptom control, QOL) –{best if measures could start from symptom presentation, rather than procedure}

PCI Use in Coronary Artery Disease  1.2 million stents placed in US in 2003 (and rising)  Large majority are elective  Medicare pays $12,231 for a drug-eluting stent placement without complications ($16,428 if there are complications)

Summary of PCI vs Med therapy trials TrialMortalityPrevent MI Short-term anginal relief Short-term QoL Long- term QoL RITA-2No diff PCI No diff ACMENo diff PCI N/A ACME-2No diff PCINo diffN/A MASSNo diff PCIN/A MASS-IINo diff PCI N/A AVERTNo diff PCINo diff TIMENo diff PCI No diff COURA GE No diff PCI*PCINo diff Adapted from Kereiakes, JACC 2007;50: * No difference at 5 years

COURAGE: Freedom from angina Time pointPCI (%) + OMT Medical therapy (%)p Baseline1213NS 1 year6658< years years7472NS Boden et al. NEJM 2007;356:

Focus Groups: Do Docs Agree with the Data? Yes! In focus group research, one cardiologist explained: “Yes, medical therapy is as effective as PCI, but when I see a lesion, the bottom line is that the ‘oculostenotic reflex’ always wins out.” Lin, GA, Dudley, RA, Redberg, RF. Archives of Internal Medicine, 2007; 167(15):1604

Do Clinicians Agree With the Data? Another cardiologist said: “I think we all know that we’re not preventing heart attacks by treating an asymptomatic stenosis. We’re going to prevent the next heart attack because of lipid lowering, aspirin, and ACE inhibitors, but nonetheless that patient in our practice leaves the lab with an open artery, the best that my interventional partners can deliver.” Lin, GA, Dudley, RA, Redberg, RF. Archives of Internal Medicine, 2007; 167(15):1604

So Why? Rationales Offered…  Anticipated regret  Patient anxiety  Belief in the Benefits of an Open Artery, notwithstanding the evidence  Medicolegal concerns  (Assumption by primary care docs that specialists know best) Lin, GA, Dudley, RA, Reberg, RF. Archives of Internal Medicine, 2007; 167(15):1604; and Lin, GA, Dudley, RA, Reberg, RF. J Gen Int Med, 2008; 23(9):1458

PCI Use in Coronary Artery Disease  Rapid increase in use in face of these trials data are hard for policymakers and purchasers to understand or accept  Physicians’ rationale for continuing current practice doesn’t meet policymakers expectations for evidence-based medicine

Using Incentives: A Reference Today you’ve heard the rationale for using payment to address quality/efficiency…it’s coming for sure In the article referenced on the next slide, we attempted to synthesize the economic, organizational behavior, and psychology literature to offer a model of how clinicians and clinical organizations respond to incentives You should read this article if you are going to try to get your practice or hospital to respond to incentives

13 Design of the Incentive Program: Financial characteristics (e.g., revenue potential, cost of compliance) Reputational aspects (e.g., extent of efforts to market data to patients and peers) Psychological dimensions (e.g., salience of quality measures to provider’s practice) Patient factors (e.g., education, income, cost sharing) Provider decision-maker Provider group Provider response: change in care structure or process Change in outcomes: Clinical performance measures Non-financial outcomes for the provider (e.g., provider satisfaction) Financial results for the provider Environmental variables: General approach to payment; regulatory and market factors Organizational factors (if applicable, e.g., the organization’s internal incentive programs or information technology) Incentive Provider Predisposing/Enabling factors Source: Frolich et al. Health Policy, 2007; 80(1):179

Beyond Payment Reform and Public Reporting Purchasers could try to improve quality and/or efficiency in other ways that have largely gone unused –Help docs with actual clinical practice –Allow volunteer docs/hospitals to begin to measure/report the really high value clinical stuff for rewards –CAD in CAD: Coalition Against Defensive Medicine in CAD

Helping Physicians Practice: Taking Advantage of Health Plans’ Information Change “1-800-prior authorization” to “ Information Valet” –A health plan “Information Valet” would help your staff find prior tests done and results, prior medications tried, before the office visit A formulary compendium: –Insurers could put all their formulary info into a compendium, so docs could develop prescribing patterns that reduced paperwork (e.g., each time you need an ACE-I, you start with “always covered-ipril” to prevent pharmacy callbacks)

Let Volunteers Provide More Information Many health plans are designating cardiac “Centers of Excellence” –Sometimes, this includes requests for ACC NCDR data and other clinical data –However, MUCH more could be done, such as measuring appropriateness, and because it’s for COE designation, it’s optional

CAD in CAD: Coalition Against Defensive Medicine in CAD Doctors say they do unnecessary tests and treatments for medicolegal reasons (patients demand them) Drug and device manufacturers have extensive communications programs to docs and patients Why shouldn’t specialty organizations have messaging for patients and docs –Teach patients that “more is not always better” –Provide materials docs could submit in the event of a lawsuit (like an amicus brief) –Health plans and employers could sponsor this

Using Incentives: Summary There are important areas in cardiology in which there are legitimate questions about quality and efficiency or appropriateness Payment has some impact on performance, so reform might help, but many other factors are important Health plans and other policymakers have barely scratched the surface of increasing info availability Making the discussion about more than payment could improve relationships and the tenor of the discussion

Just in case The next 2 slides are for use only if someone objects to basing payment on performance The last 4 are in case someone says performance- based payment has tried and failed

AAN Leadership Uses Bonuses:

AAN Leadership Uses Penalties:

Using Incentives: Some Pictures

Would you clip that coupon?

Enjoy your latte! CMS Physician Quality Reporting Initiative (PQRI): 1.5% CMS-Premier demonstration: –Top 10% of hospitals get extra 2% of selected covered payments, second 10% get 1%