California Pay for Performance Dolores Yanagihara, MPH Integrated Healthcare Association Mendocino Health Information Exchange June 18, 2008

2 Agenda California P4P Program information P4P Results –Performance –Public Reporting –Payment –Stakeholder Feedback Overcoming Program Challenges –Technical –Political / Legal

3 Integrated Healthcare Association (IHA) Statewide leadership group that promotes quality improvement, accountability, and affordability of health care in California Mission: to create breakthrough improvements in health care services for Californians through collaboration among key stakeholders Principal projects: –pay for performance –medical technology assessment and purchasing –measurement and reward of efficiency in health care –prevention programs directed at obesity

4 Background Institute of Medicine (IOM) reports a call to action to improve quality and safety of U.S. healthcare with specific recommendations including: Quality measurement and reporting Public Transparency Incentives for quality improvement (Pay for Performance)

5 California P4P: History 2000: Stakeholder discussions started 2002: Testing year –IHA received CHCF Rewarding Results Grant 2003: First measurement year 2004: First reporting and payment year 2008: Sixth measurement year; fifth reporting and payment year

6 The California P4P Players 8 health plans  Aetna, Blue Cross, Blue Shield, Cigna, Health Net, Kaiser, PacifiCare, Western Health Advantage 40,000 physicians in 235 physician groups HMO commercial members  Payout: 5.5 million  Public reporting: 11 million* * Kaiser medical groups participate in public reporting only starting 2005

7 Program Governance Steering Committee – determine strategy, set policy Planning Committee – overall program direction Technical Committees – develop measure set Payment Committee – recommend payment method IHA – facilitates governance/project management Sub-contractors NCQA/DDD – data collection and aggregation NCQA/PBGH – technical support Thomson – efficiency measurement Multi-stakeholders “own” the program

8 Goal of California P4P To create a compelling set of incentives that will drive breakthrough improvements in clinical quality and the patient experience through: √Common set of measures √Data aggregation √A public report card √Health plan payments

9 Organizing Principles Measures must be valid, accurate, meaningful to consumers, important to public health in CA, economical to collect (admin data), stable, and get harder over time New measures are tested and put out for stakeholder comment prior to adoption Data collection is electronic only (no chart review) Data from all participating health plans is aggregated to create a total patient population for each physician group Reporting and payment at physician group level Financial incentives are paid directly by health plans to physician groups

10 The California P4P Process Testing Year Measurement Year Data Aggregation and Payments Public Comment Reporting Year Development Year Public Comment

11 MY 2008 Clinical Measures Acute Care Treatment for Children with Upper Respiratory Infection Appropriate Testing for Children with Pharyngitis Avoidance of Antibiotic Treatment in Adults with Acute Bronchitis Use of Imaging Studies for Low Back Pain Preventive Care Breast Cancer Screening Cervical Cancer Screening Childhood Immunizations Chlamydia Screening Colorectal Cancer Screening Chronic Disease Care Appropriate Meds for Persons with Asthma Cholesterol Mgmt: LDL Screening & Control <100 Monitoring of Patients on Persistent Medication

12 MY 2008 Patient Experience Measures Specialty Care Timely Care and Service composite Doctor-Patient Interaction composite Care Coordination composite Overall Ratings of Care Office Staff composite Health Promotion composite

13 MY 2008 IT-Enabled “Systemness” Domain 1.Data Integration for Population Management 2.Electronic Clinical Decision Support at the Point of Care 3.Care Management Coordination with practitioners Chronic care management processes Continuity of care after hospitalization 4.Access and Communication Standards 5.Physician Measurement and Reporting

14 New Domain for MY 2008 Coordinated Diabetes Care Domain –Diabetes Clinical Measures HbA1c screening, poor control >9, good control <7 LDL screening, control <100 Nephropathy Monitoring –Diabetes Population Management Activities Diabetes Registry (including blood pressure) Actionable Reports on Diabetes care Individual Physician Reporting on Diabetes measures –Diabetes Care Management

15 New Measures for “Testing” in 2008 Test in 2008 for potential inclusion in MY 2009 Clinical –Depression Screening and Assessment of High Risk Patients –Inpatient Readmissions within 30 Days –Asthma Medication Ratio –Evidence-based Cervical Cancer Screening (re-test) –Potentially Avoidable Hospitalization (re-specify and re-test)

16 Efficiency Measurement Purchasers and Health Plans are demanding that cost be included in the equation Quality + Cost = Value Use both population-based and episode-based methodologies Use both standardized costs and actual costs to account for utilization and pricing

17 Efficiency Measures 1. Generic prescribing (MY 2007) Calculated by cost and by number of scripts 2. Overall Group Efficiency (MY 2009) Episode and population based methodologies Calculated using both standardized and actual costs 3. Efficiency by Clinical Area (MY 2009) Calculated using standardized costs 4. Actual to Standardized Pricing Indices (MY 2009)

18 Plans OR Group CCHRI Group Clinical Measures IT-Enabled Systemness Measures Patient Experience Measures Audited rates using Admin data Audited rates using Admin data PAS Scores Survey Tools and Documentation Data Aggregator: NCQA/DDD Produces one set of scores per Group Physician Group Report for QI Health Plan Report for Payment Report Card Vendor for Public Reporting CA P4P Data Collection & Aggregation Efficiency Measures Vendor/Partner: Thomson (Medstat) Produces one set of efficiency scores per Group Plans Claims/ encounter data files

19 Aggregating Data Benefits: Increase sample size –More reportable data –More robust and reliable results Measure total patient population Produce standardized, consistent performance information Requirements: Consistent unit of measurement Standard, specified measures

20 The Power of Data Aggregation Aggregating data across plans creates a larger denominator and allows valid reporting and payment for more groups Health Plan Size # of Health Plans % physician groups with sufficient sample size to report all clinical measures using Plan Data Only % physician groups with sufficient sample size to report all clinical measures using the Aggregated Dataset < 500K members 316%70% >1M members 430%65%

P4P Results

22 Overview of P4P Program Results Year over year improvement across all measure domains and measures Single public report card through state agency (Office of the Patient Advocate) Incentive payments totaling over $210 million for measurement years (MY) Physician groups highly engaged and generally supportive

23 Clinical Results MY

24 Regional Variation in Clinical Performance MY 2006 Results by Region Top Performing Groups

25 IT Measure 1: Population Management Activities

26 IT Measure 2: Point-of-Care Activities Percentage of Groups

27 Correlation Between IT Adoption and Clinical Performance

28 Public Report Card

29 Health Plan Payment Results Each health plan determines their own reward methodology and payment amount ( Most plans pay on relative performance, after meeting thresholds $38 M paid out in 2004 $54 M paid out in 2005 $55 M paid out in 2006 $65 M paid out in 2007 (about 1.5-2% of base pay on average)

30 Paying for Performance & Improvement Excerpt from CMS Hospital Value-Based Purchasing Listening Session #2, April 12, 2007

31 Physician Group Engagement Program Strengths –Physician groups are highly engaged –74% believe the measures are reasonable –Widespread support for increased incentives –Belief the program has increased the focus on quality improvement and IT capabilities Program Weaknesses –Lack of consumer interest in public reporting –Concern about the potential for too many measures Overall Rating –Mean score of 3.86 for importance (on a 1 to 5 scale)

32 Health Plan Engagement Program Strengths –Increased collaboration –Push toward QI –Investments in IT –Greater accountability and transparency Program Weaknesses –Improvements viewed as marginal –Concerns about “teaching to the test” –Lack of a positive ROI –Failure of clinical data feed to raise HEDIS scores Overall Rating mean score (1 to 5 pt. scale)

Overcoming Program Challenges

34 The Data Problem The data you want: Easy to collect Clinically rich Complete and consistent Across product lines/payors Whole eligible population Claims Data Y N Y Paper Medical Record N Y Y? Y N Electronic Medical Record Y? Y

35 Addressing the Data Problem Enhancing claims data Identify and address data gaps Encourage use of CPT-II codes Develop supplemental clinical data –Lab results –Preventive care / chronic disease registries –Exclusion databases Push EMR adoption

36 Addressing the Data Problem Example: Blood pressure control –Previously a chart review measure –Creation of CPT-II codes allows administrative measurement –Incentivize inclusion in registry  Create system for routinely collecting information

37 Data Exchange Standard format and data definitions Defined data flow process Enhanced member matching Adequate documentation

38 Data Exchange Issues LDL<130 Rates - Diabetes PopulationN Admin- Only Mean All-Data Mean National HEDIS Rates, MY P4P Plan HEDIS Rates, MY P4P Plan-Specific Rates, MY 2004 Plan 1 (not used in aggregation) 0.0 Plan 2 (not used in aggregation) 0.5 Plan 3 (not used in aggregation) 1.0 Plan 4 (not used in aggregation) 6.3 Plan Plan Plan Self-Report Average 51.0

39 Facilitating Data Exchange

40 Legal and Political Issues Complying with HIPAA regulations Overcoming Non-Disclosure Agreements Addressing Data Ownership

41 Addressing Legal and Political Issues Example #1: Lab results –Code of Conduct for bi-directional data exchange –Lab authorization form –Disease Management Coordination initiative

42 Addressing Legal and Political Issues Example #2: Efficiency measurement –BAA –Antitrust Counsel –Consent to Disclosure Agreements –No group-specific results shared first two years –Publicly available sources of data

43 Conclusions on Data Issues Data is a limiting factor in performance measurement Administrative data can be enhanced by supplemental sources Data transfer of supplemental sources needs to be standardized Aggregation can make results more robust Legal and political issues carry as much weight as technical issues

44 Summary Initial process goals achieved “Breakthrough” outcome goal not achieved Strong collaborative “platform” established Fundamental changes in direction and implementation required to address emerging affordability goal

45 California Pay for Performance For more information: (510) Initial support for IHA Pay for Performance provided by California Health Care Foundation