1 Pay for Performance and Regional Variation: Do the Rich Get Rich and the Poor Stay Poor? Michael J. Belman, MD, MPH Tracy I. Wang, MPH Clinical Quality and Innovations Blue Cross of California National Pay for Performance Summit February 28, 2008

2 Introduction Integrated Healthcare Association (IHA) 5 th year of statewide measurement Over 200 groups and IPAs in the program Incentives from 7 California health plans Clinical quality measures and Patient Assessment Survey Total Blue Cross bonus payment for measurement year (MY) 2006 was $69 million

3 Regional Inequality Clinical Quality North vs. South CA

4 Regional Inequality Patient Satisfaction North vs. South CA

5 Blue Cross of CA HMO Membership Total = 1.4 Million 5% 1% 12% 4% 40% 18% 7% 12% SACRAMENTO (2%) % = Percent of Blue Cross HMO members in each region

6 Clinical Quality by Region

7 Patient Satisfaction by Region

8 Regional Performance Metrics Clinical Quality Overall Ranking

9 Regional Performance Metrics Patient Satisfaction Ranking

10 Regional Performance Metrics Treatment for Children with URI

11 Regional Performance Metrics Breast Cancer Screening

12 Health Disparities and California P4P: Clinical Performance Variation MY 2006 Clinical Results by Region Kaiser Groups Source: Slide courtesy of IHA – Data from

13 IT Implementation Has Impact on Clinical Quality Scores

14 IT Implementation Has No Impact on Patient Satisfaction Scores

15 Blue Cross Bonus Awards by Region MY 2004 to MY 2006

16 Bonus Awards by Region Disparity Between Bonus vs. Membership

17 Did the Rich Stay Rich?

18 Did the Poor Stay Poor?

19 Health Disparities and California P4P: Market Statistics (2005 Data) Demo- graphics Riverside San Ber- nardino FresnoSacra- mento San Francisco National Average PCP / 100K PCP + SPC / 100K Hospital Beds / Source: 2006 HealthLeaders-InterStudy Market Overview

20 Health Disparities and California P4P: A Tale of Two Regions DemographicsInland EmpireBay Area PCPs/100K Pop % Pop. Medi-Cal17%12% % Hispanic43%21% Per Capita Income$21,733$39,048

21 Inland Empire Performance Metrics Inland Demographics Lower PCP and specialist numbers in Inland Empire compared to California and the nation Lower number of college graduates and higher number with high school education or below Ethnic breakdown amongst insured in San Bernardino County shows –Higher percent African American and Latino –Lower percent Asian and White Lower percent insured in Inland Empire compared to California

22 Regional Plus Ethnic Disparities

23 Number of Members Impacted by Disparity Differ Across Regions

24 Health Plan Distribution by Medical Group Performance 58% 65% Source: Danielsen, B. and Damberg, C. (2007) Analysis of the Relative Contributions of Health Plans and Provider Organizations to the 2007 PAS scores. * * * * Blue Cross of California

25 US News and World Report (2007) HMO Ranking BCBS – MA, RI Anthem (WellPoint) – CT, NH, ME, RI HealthNet – CT Cigna – NH Aetna - CT California –HealthNet –Blue Shield –Blue Cross –Aetna National Plans in Top 35 National Plans Healthplan performance determined by regional factors (provider network, ethnicity, SES)

26 Persistent and consistent regional variation in performance Low performing regions in general do not improve relative performance Inland Empire has lowest score but Los Angeles County has largest population with low scores Membership has not declined in poor performing groups Regional disparities may adversely impact healthplan HEDIS Current Incentive formula perpetuates disparity in bonus award if thresholds or rank used to determine bonus Breakthrough improvement may require investment in personnel and infrastructure Conclusions