The “Value” in Value Based Purchasing Michael F. Parry, MD, FACP, FIDSA, FSHEA Director of Infectious Diseases and Microbiology Stamford Hospital

Disclosures Dr Parry is a paid consultant of Ethicon, Inc. Additional Disclosures Research support from Glaxo Consultant for Durata Pharmaceuticals

Agenda Changing healthcare landscape Affordable Care Act Impact of HAIs Using evidence-based solutions Next steps – fully aligning to “Goal Zero”

What is “value based purchasing”? The Government’s Argument Healthcare is too expensive You can’t control healthcare costs so I will help Quality of healthcare needs to be improved I’m only going to pay for improved quality (which I will define) My goal is to pay less and get better quality Higher quality = Greater Value (i.e., value based purchasing) Lower cost

Top Concerns of Hospital CEOs Issue 2013 2012 2011 Financial challenges 2.4 2.5 Healthcare reform implementation 4.3 4.7 4.5 Governmental mandates 4.9 5.0 4.6 Patient safety and quality 4.4 Care for the uninsured 5.6 5.2 Patient satisfaction 5.9 Physician-hospital relations 6.0 5.8 5.3 Population health management 7.6 7.9 — Technology 7.2 Personnel shortages 8.0 7.4 Creating an accountable care organization 8.6 8.4

Affordable Care Act The third-party trademarks used herein are trademarks of their respective owners.

Changing Healthcare Landscape Affordable Care Act Regulatory Requirements Provider Opportunities in Changing Landscape Reportable quality metrics 2,3,4 Measured patient outcomes 2,4 Patient satisfaction reporting 2,4 Evidence-based medicine practices/protocols Lower/eliminate readmissions Eliminate healthcare acquired infections Increase patient satisfaction Improve patient outcomes CMS readmission penalties 3 Non payment of Healthcare Acquired Conditions (HACs) 1 Value-based purchasing 2 1 – Medicare Program: Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2009 Rates; Payments for Graduate Medical Education in Certain Emergency Situations; Changes to Disclosure of Physician Ownership in Hospitals and Physician Self-Referral Rules; Updates to the Long-Term Care Prospective Payment System; Updates to Prospective Payment System; Updates to Certain IPPS-Excluded Hospitals; and Collection of Information Regarding Financial Relationship Between Hospitals; Final Rule, Federal Register, Volume 73, Volume 161, Tuesday, August, 19, 2008. 2 – Medicare Program: Hospital Inpatient Value-Based Purchasing Program, Federal Register, Volume 76, Number 88, Friday, May 6, 2011. 3 - Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and FY2012 Rates; Hospitals’ FTE Resident Caps for Graduate Medical Education Payment, Federal Register, Volume 76, Number 160, Thursday, August 18, 2011. 4 – Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations, Federal Register, Volume 76, Number 212, Wednesday, November, 2, 2011.  

The Affordable Care Act 1. Readmission Reduction Program The Advisory Board Company, Healthcare Industry Committee. Hospital Readmissions Reduction Program. C-Suite Cheat Sheet Series. August 2013.

The Affordable Care Act 2. (HAC) Hospital Acquired Condition Program Set to start in FY 2015, the (HAC) Reduction Program is another pay for performance initiative under the Affordable Care Act The HAC Reduction Program will work in tandem with the Value Based Purchasing Program (VBP) and Readmissions Reduction Program to incentivize higher quality hospital care at a lower cost CMS has created a list of reasonably preventable HACs including: Foreign objects retained after surgery Air embolisms Blood incompatibility Pressure ulcers, falls/trauma Manifestations of poor glycemic control Infections Thrombosis The Advisory Board Company, Healthcare Industry Committee. Hospital-Acquired Condition Reduction Program. C-Suite Cheat Sheet Series. August 2013.

The Affordable Care Act 2. Hospital Acquired Condition (HAC) Program The HAC penalty will be enforced after a hospital’s Value Based Purchasing and Readmissions Reduction adjustments are made and could decrease all inpatient payments by 1% for an institution In FY 2015, the HAC Reduction Program will rank hospitals based on their HAC rates, and those in the top 25% for HAC rates will receive a 1% reduction in their overall Medicare reimbursement rate Hospitals will be judged on their performance in two domains Upcoming Changes to HAC Program Metric FY2015 FY 2016 FY 2017 CLABSI ✓ CAUTI SSI – Colon SSI –  Abdominal Hysterectomy MRSA C. Difficle The Advisory Board Company, Healthcare Industry Committee. Hospital-Acquired Condition Reduction Program. C-Suite Cheat Sheet Series. August 2013.

The Affordable Care Act 2. Hospital Acquired Condition (HAC) Program Domain 1 (AHRQ Measure) Domain 2 (CDCMeasure) Weighted 35% Weighted 65% AHRQ PSI-90 Composite This measure consists of: PSI-3: pressure ulcer PSI-6: latrogenic pneumothorax PSI-7: central venous catheter-related blood stream infection rate PSI-8: hip fracture rate PSI-12: postoperative PE/DVT rate PSI-13: sepsis rate PSI-14: wound dehiscence rate PSI-15: accidental puncture 2015 (2 measures): CAUTI CLABSI 2016 (1 additional measure): Surgical Site Infection (Colon Surgery and Abdominal Hysterectomy 2017 (2 additional measures): MRSA C Diff Association of American Medical Colleges presentation. https://s3.amazonaws.com/public-inspection.federalregister.gov/2013-18956. Accessed February 2014.

The Affordable Care Act 3. Value Based Purchasing As part of the Affordable Care Act, congress has authorized the inpatient Value Based Purchasing Program, which provides a data reporting infrastructure for hospitals to help ensure quality patient outcomes CMS will implement Value Based Purchasing to Inpatient Prospective Payment System which affects 3,500 hospitals, representing largest share of Medicare spending Hospitals will pay a percent withholding on the front end and will either earn money back, lose percent paid in, or earn additional dollars Funding of Value Based Purchasing program will be through the reduction of hospitals DRG payments for each discharged (Inpatient Protective Payment System) Fiscal Year MS-DRG Operating Payment Reduction FY 2013 1% FY 2014 1.25% FY 2015 1.50% FY 2016 1.75% FY 2017 and Beyond 2% http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/hospital-value-based-purchasing/index.html?redirect=/hospital-value-based-purchasing/ Accessed on April 26, 2013

The Affordable Care Act How Does Value Based Purchasing Impact You? Unlike the HAC and RR Program, VBP is budget neutral, CMS will not keep any portion of the percent withheld nationally CMS redistributes the percent withheld across hospitals with highest achievement Redistribution is based on performance Best performers win others break even or lose Your hospital’s 1-2% could be redistributed to other hospitals with better performance, or you could receive other underperforming hospital’s 1-2% So what does that mean? http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/hospital-value-based-purchasing/index.html?redirect=/hospital-value-based-purchasing/ Accessed on April 26, 2013

The Affordable Care Act Value Based Purchasing Scoring Improvement (self) Hospitals will be assessed on how much their current performance changes from their own baseline period performance Points will be awarded based on how much distance they cover between that baseline and the benchmark score Total Performance Score (TPS) VS TPS calculated by combining the greater of the hospital’s achievement or improvement points on each measure to determine a score for each domain, multiplying each domain score by the proposed domain weight and adding the weighted scores together Achievement (others) Hospitals measured based on how much their current performance differs from all other hospitals’ baseline period performance Points will be awarded based on hospital’s performance compared to threshold and benchmark scores for all hospitals  VS http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/hospital-value-based-purchasing/index.html?redirect=/hospital-value-based-purchasing/ Accessed on April 26, 2013

The Affordable Care Act Value Based Purchasing Domains Tracking VBP Measures Across Time 19 Domain Description FY 2013 FY 2014 FY 2015 FY 20161 Clinical Process AMI-7a Fibrinolytic therapy received within 30 minutes of hospital arrival X X X X AMI-8a Primary PCI received within 90 minutes of hospital arrival X X X - HF-1 Discharge instructions X X X - IMM-2 Influenza Immunization - - - X PN-3b Blood cultures performed in the ED prior to initial antibiotic received in hospital X X X - PN-6 Initial antibiotic selection for CAP in immunocompetent patient X X X X SCIP-Inf-1 Prophylactic antibiotic received within one hour prior to surgical incision X X X X SCIP-Inf-2 Prophylactic antibiotic selection for surgical patients X X X X SCIP-Inf-3 Prophylactic antibiotics discontinued within 24 hours after surgery end time X X X X SCIP-Inf-4 Cardiac surgery patients with controlled 6am postoperative serum glucose X X X X SCIP-Inf-9 Urinary catheter removed on postoperative day 1 or postoperative day 2 - X X X SCIP-Card-2 Surgery patients on prior ß-blocker receive ß-blocker during perioperative period X X X X SCIP-VTE-1 Surgery patients with recommended venous thromboembolism prophylaxis ordered X X - - SCIP-VTE-2 Patients receiving appropriate VTE prophylaxis 24 hours prior to and after surgery X X X X Patient Experience HCAHPS1 Patient Satisfaction Measures X X X X Outcomes MORT-30-AMI Acute myocardial infarction 30-day mortality rate - X X X MORT-30-HF Heart failure 30-day mortality rate - X X X MORT-30-PN Pneumonia 30-day mortality rate - X X X PSI-90 Complication/patient safety for selected indicators (composite) - - X X CAUTI Catheter-Associated Urinary Tract Infection - - - X CLABSI Central line associated blood stream infection - - X X SSI Surgical Site Infection, Colon, Abdominal Hysterectomy - - - X Efficiency MSPB_1 Medicare spending per beneficiary - - X X The Affordable Care Act Value Based Purchasing Domains Eric Fontana, “The Future of Value Based Purchasing” Advisory Board Webinar http://www.advisory.com/Research/Physician-Executive-Council/Events/Webconferences/2013/The-Future-of-Value-Based-Purchasing May 23, 2013

Tracking VBP Measures Across Time 19 Domain Description FY 2013 FY 2014 FY 2015 FY 20161 Clinical Process AMI-7a Fibrinolytic therapy received within 30 minutes of hospital arrival X X X X AMI-8a Primary PCI received within 90 minutes of hospital arrival X X X - HF-1 Discharge instructions X X X - IMM-2 Influenza Immunization - - - X PN-3b Blood cultures performed in the ED prior to initial antibiotic received in hospital X X X - PN-6 Initial antibiotic selection for CAP in immunocompetent patient X X X X SCIP-Inf-1 Prophylactic antibiotic received within one hour prior to surgical incision X X X X SCIP-Inf-2 Prophylactic antibiotic selection for surgical patients X X X X SCIP-Inf-3 Prophylactic antibiotics discontinued within 24 hours after surgery end time X X X X SCIP-Inf-4 Cardiac surgery patients with controlled 6am postoperative serum glucose X X X X SCIP-Inf-9 Urinary catheter removed on postoperative day 1 or postoperative day 2 - X X X SCIP-Card-2 Surgery patients on prior ß-blocker receive ß-blocker during perioperative period X X X X SCIP-VTE-1 Surgery patients with recommended venous thromboembolism prophylaxis ordered X X - - SCIP-VTE-2 Patients receiving appropriate VTE prophylaxis 24 hours prior to and after surgery X X X X Patient Experience HCAHPS1 Patient Satisfaction Measures X X X X Outcomes MORT-30-AMI Acute myocardial infarction 30-day mortality rate - X X X MORT-30-HF Heart failure 30-day mortality rate - X X X MORT-30-PN Pneumonia 30-day mortality rate - X X X PSI-90 Complication/patient safety for selected indicators (composite) - - X X CAUTI Catheter-Associated Urinary Tract Infection - - - X CLABSI Central line associated blood stream infection - - X X SSI Surgical Site Infection, Colon, Abdominal Hysterectomy - - - X Efficiency MSPB_1 Medicare spending per beneficiary - - X X The Affordable Care Act Value Based Purchasing – Clinical Process Domain Eric Fontana, “The Future of Value Based Purchasing” Advisory Board Webinar http://www.advisory.com/Research/Physician-Executive-Council/Events/Webconferences/2013/The-Future-of-Value-Based-Purchasing May 23, 2013

Tracking VBP Measures Across Time 19 Domain Description FY 2013 FY 2014 FY 2015 FY 20161 Clinical Process AMI-7a Fibrinolytic therapy received within 30 minutes of hospital arrival X X X X AMI-8a Primary PCI received within 90 minutes of hospital arrival X X X - HF-1 Discharge instructions X X X - IMM-2 Influenza Immunization - - - X PN-3b Blood cultures performed in the ED prior to initial antibiotic received in hospital X X X - PN-6 Initial antibiotic selection for CAP in immunocompetent patient X X X X SCIP-Inf-1 Prophylactic antibiotic received within one hour prior to surgical incision X X X X SCIP-Inf-2 Prophylactic antibiotic selection for surgical patients X X X X SCIP-Inf-3 Prophylactic antibiotics discontinued within 24 hours after surgery end time X X X X SCIP-Inf-4 Cardiac surgery patients with controlled 6am postoperative serum glucose X X X X SCIP-Inf-9 Urinary catheter removed on postoperative day 1 or postoperative day 2 - X X X SCIP-Card-2 Surgery patients on prior ß-blocker receive ß-blocker during perioperative period X X X X SCIP-VTE-1 Surgery patients with recommended venous thromboembolism prophylaxis ordered X X - - SCIP-VTE-2 Patients receiving appropriate VTE prophylaxis 24 hours prior to and after surgery X X X X Patient Experience HCAHPS1 Patient Satisfaction Measures X X X X Outcomes MORT-30-AMI Acute myocardial infarction 30-day mortality rate - X X X MORT-30-HF Heart failure 30-day mortality rate - X X X MORT-30-PN Pneumonia 30-day mortality rate - X X X PSI-90 Complication/patient safety for selected indicators (composite) - - X X CAUTI Catheter-Associated Urinary Tract Infection - - - X CLABSI Central line associated blood stream infection - - X X SSI Surgical Site Infection, Colon, Abdominal Hysterectomy - - - X Efficiency MSPB_1 Medicare spending per beneficiary - - X X The Affordable Care Act Value Based Purchasing – Patient Experience Domain HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) Composite Topics Nurse Communication (Question 1, Q2, Q3) Doctor Communication (Q5, Q6, Q7) Responsiveness of Hospital Staff (Q4, Q11) Pain Management (Q13, Q14) Communication About Medicines (Q16, Q17) Discharge Information (Q19, Q20) Individual Items Cleanliness of Hospital Environment (Q8) Quietness of Hospital Environment (Q9) Global Items Overall Rating of Hospital (Q21) Willingness to Recommend Hospital (Q22) Eric Fontana, “The Future of Value Based Purchasing” Advisory Board Webinar http://www.advisory.com/Research/Physician-Executive-Council/Events/Webconferences/2013/The-Future-of-Value-Based-Purchasing May 23, 2013

The Affordable Care Act Value Based Purchasing – Outcomes Domain Patient Safety for Selected Indicators (Composite) PSI 03 – Pressure Ulcer Rate PSI 06 – Iatrogenic Pneumothorax Rate PSI 07 – Central Venous Catheter-Related Bloodstream Infection Rate PSI 08 – Postoperative Hip Fracture Rate PSI 12 – Postoperative Pulmonary Embolism or Deep Vein Thrombosis Rate PSI 13 – Postoperative Sepsis Rate PSI 14 – Postoperative Wound Dehiscence Rate PSI 15 – Accidental Puncture or Laceration Rate https://www.cms.gov/Outreach-and-Education/Outreach/NPC/Downloads/HospVBP_FY15_NPC_Final_03052013_508.pdf Accessed February 2014.

The Affordable Care Act Value Based Purchasing – Efficiency Domain Medicare Spending per Beneficiary An MSPB Episode includes all Part A and Part B claims between 3 days prior to index admission to 30 days after the hospital discharge Claim inclusion in episode based on from date (or admission date for inpatient claims) By 2016 this one measure will account for 25% of all Value Based Purchasing Dollars http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/NPC-MSPB-09Feb12-Final508.pdf Accessed February 2014.

The Affordable Care Act Value Based Purchasing – Efficiency Domain

The Future of VBP Domains FY 2014 FY 2015 http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/hospital-value-based-purchasing/index.html?redirect=/hospital-value-based-purchasing/ Accessed on April 26, 2013

The Affordable Care Act Value Based Purchasing Timeline FY 2016 Value Based Purchasing Domains Baseline Period Performance Period Clinical Process of Care Jan. 1, 2012 – Dec. 31, 2012 Jan. 1, 2014 – Dec. 31, 2014 Patient Experience of Care Outcome: Mortality Oct. 1, 2010 – June 30, 2011 Oct. 1, 2012 – June 30, 2014 Outcome: AHRQ PSI-90 Oct. 15, 2010 – June 30, 2011 Oct. 15, 2012 –June 30, 2014 Outcome: CAUTI / CLABSI/ SSI Efficiency Clinical process gives way to outcomes and efficiency over time as the model becomes more Pay for Performance The Advisory Board Company, Healthcare Industry Committee. Hospital Value-Based Purchasing. C-Suite Cheat Sheet Series. August 2013.

Percent of CMS Dollars at Stake by FY 2017 6% Readmission Reduction Program 3% Value Based Purchasing 2% Healthcare Acquired Condition Program 1% The Advisory Board Company, Healthcare Industry Committee. Hospital Value-Based Purchasing. C-Suite Cheat Sheet Series. August 2013. The Advisory Board Company, Healthcare Industry Committee. Hospital Readmissions Reduction Program. C-Suite Cheat Sheet Series. August 2013. The Advisory Board Company, Healthcare Industry Committee. Hospital-Acquired Condition Reduction Program. C-Suite Cheat Sheet Series. August 2013.

CLABSI Impact The third-party trademarks used herein are trademarks of their respective owners.

8 Ways CLABSIs Can Impact Reimbursement In 2008 CMS stopped payment of 10 hospital acquired conditions including VASCULAR CATHETER RELATED INFECTIONS 2015 HAC Program: Domain 1 – PSI 90 2015 HAC Program: Domain 2 – CLABSI VBP: Outcomes Domain (VBP)-CLABSI specific line item VBP: Outcomes Domain (VBP)-CLABSI is one of 8 items making up composite score for PSI-90 which is a subset of VBP outcomes domain VBP: Efficiency Domain (VBP)-CLASBI can potentially elevate Medicare spending per beneficiary VBP: Potential Impact to Patient Satisfaction Readmission Program http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/downloads/HACFactSheet.pdf

Your Potential Financial Impact American Hospital Directory Financial Data

Your CLABSI Data and Outcome Measures Hospital Compare

Joint Commission National Patient Safety Goal #7 Hospitals implement policies and practices aimed at reducing the risk of central line-associated bloodstream infections that meet regulatory requirements and are aligned with evidence-based standards The Joint Commission: Comprehensive Accreditation Manual for Hospitals: The Official Handbook. Oak Brook, IL: Joint Commission Resources, 2011

Getting to Zero The third-party trademarks used herein are trademarks of their respective owners.

2011 CDC Guidelines CHG impregnated sponge dressings received a Category 1B recommendation for reducing the risk of CLABSIs Intended to provide evidence-based recommendations for preventing intravascular catheter-related infections 5 major areas of emphasis: Education of healthcare professionals Use maximal sterile precautions (MSP) Use of CHG skin prep Site selection and avoiding routine replacement Use antiseptic/antibiotic impregnated catheters and CHG impregnated sponge dressing (If rate of infection not decreasing despite adherence to above 4 strategies) Checklist Targets elimination of CRBSI from all patient-care areas “strongly recommended for implementation and supported by some experimental, clinical, or epidemiologic studies and a strong theoretical rationale” CHG impregnated sponge dressings are the only form of CHG dressing recommended in new CDC guidelines “No recommendation is made for other types of chlorhexidine dressings (Unresolved Issue)” O’Grady NP, Alexander M, et al., Guidelines for the prevention of intravascular catheter-related infections. Centers for Disease Control and Prevention. MMWR Recomm Rep 2011 April 1.

Next Steps – “Goal Zero” CDC – Target elimination of CLABSIs from all patient-care areas CVC Lines & PICC Lines Dialysis Patients Home Infusion Peripheral IV Lines Arterial Lines LVADs Surgical Drains Readmission Rates Staff Compliance = Kits 1 – Medicare Program: Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2009 Rates; Payments for Graduate Medical Education in Certain Emergency Situations; Changes to Disclosure of Physician Ownership in Hospitals and Physician Self-Referral Rules; Updates to the Long-Term Care Prospective Payment System; Updates to Prospective Payment System; Updates to Certain IPPS-Excluded Hospitals; and Collection of Information Regarding Financial Relationship Between Hospitals; Final Rule, Federal Register, Volume 73, Volume 161, Tuesday, August, 19, 2008. 2 – Medicare Program: Hospital Inpatient Value-Based Purchasing Program, Federal Register, Volume 76, Number 88, Friday, May 6, 2011. 3 - Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and FY2012 Rates; Hospitals’ FTE Resident Caps for Graduate Medical Education Payment, Federal Register, Volume 76, Number 160, Thursday, August 18, 2011. 4 – Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations, Federal Register, Volume 76, Number 212, Wednesday, November, 2, 2011.  

Conclusion The Patient Protection & Affordable Care Act is predicated on IMPROVING, more specifically continually IMPROVING PATIENT SATISFACTION and continually IMPROVING OUTCOMES over time. The hospitals that can achieve that going forward will be the most successful.

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