1. Patient Safety from the Payer's Perspective
Strategies for Protecting Patient Safety
American Society of Law and Medicine
Suffolk University, Boston, MA
September 12, 2003
Jeffrey Kang, MD, MPH

2. Role of the Regulator versus the Purchaser
Regulators focus on mandatory structural standards and termination (or de-licensure) of unsafe providers
Purchasers focus on driving continual quality improvement (or safety improvement) through competition

3. Improving the Distribution
compliance
system change & technical assistance
consumer information
non-economic incentives
economic incentives
Actual 50 40 30 20 10
FREQUENCY
PERFORMANCE (safety)
Page 5

4. What Is Needed from Regulators
Imposition of mandatory structural standards that have been demonstrated to improve patient safety
Technical assistance
Mandatory reporting of “never events” - including revealing the patient
Mandatory profiling on standard measures in the aggregate without revealing the individual patient and with peer protection

5. The Role of Purchasers
Stop paying for “never events” (note: this begins to move us from fee for service to “fee for outcome”)
Member education with or without incentives to go to safer providers
Non-economic incentives for providers who profile as safer
Economic incentives for providers who profile as safer

6. Member Education and Incentives
Payers tend to interact with members late in the decision-making process so a member education approach not likely to be effective
Differential cost-sharing (or waiving of cost-sharing) for those members who go to safe providers maybe more effective but difficult to administer

7. Non-economic Incentives
Administrative relief
Improved claims processing and cash flow
Patient volume through education, referral, and incentives
Patient volume through network restriction (requires public acceptance that not all providers are equally safe)

8. Economic Incentives
Rewarding Performance - adding more money into the system and paying more for safer providers
Performance guarantees - contracting with providers to guarantee performance in order to maintain existing payment levels

9. Questions or Discussion