1. Transparency on Cost and Quality: Understanding Value in Health Care Through Provider Peer Grouping BHCAG, 5 th Employer Leadership Summit February 23, 2012 Stefan Gildemeister, Director Health Economics Program

2. Overview Trends in health care cost and quality – what do we know? What is Provider Peer Grouping? What information is calculated by Provider Peer Grouping? What are challenges with performing (and displaying) analysis results? Next steps 2

3. Role of the Health Economics Program Monitor health care market and provides unbiased analysis – Study trends and characteristics of the uninsured – Perform empirical research on health care cost, quality, coverage, and access – Assist in the development and analysis of health policy and health reform Implement aspects of the 2008 Minnesota health reform law 3

4. Quality Variation: Diabetes Optimal Care Source: Statewide Quality Reporting System, Health Economics Program MHCP are Minnesota Health Care Programs, which include Medicaid and MinnesotaCare 4

5. Health Care Growth Exceeds Growth in Income & Wages Source: HEP analysis of annual health plan reports, preliminary 5

6. Trends in Cost Sharing in Minnesota’s Private Market 6 Source: HEP analysis of annual health plan reports, preliminary

7. What is Provider Peer Grouping? A system for providing comparative information to consumers on variation in health care cost and quality across providers: – …a uniform method of calculating providers' relative cost of care, defined as a measure of health care spending including resource use and unit prices, and relative quality of care… (M.S. § 62U.04, Subd. 2) – a combined measure that incorporates both provider risk- adjusted cost of care and quality of care… (M.S. § 62U.04, Subd. 3) 7

8. What Types of Provider Peer Grouping Needs to be Developed? 1. Total Care 2. Care for Specific Conditions The commissioner shall develop a peer grouping system for providers based on a combined measure that incorporates both provider risk-adjusted cost of care and quality of care, and for specific conditions… (M.S.§62U.04, Subd. 3) Both types of analysis are to be done annually for hospitals and for physician clinics 8

9. Information Calculated by Provider Peer Grouping

10. Results for Consumers – Example 1 Low Cost

11. Results for Consumers – Example 2 Process of Care Score: 27 Process of CareNumber of Patients Perfor- mance Rate Quality Points Earned Heart Attack Care AMI-1 (CMS) Heart attack patients given aspirin at arrival 54100%10 AMI-2 (CMS) Heart attack patient given aspirin at discharge 4095%7 AMI-3 (CMS) Heart attack patients given ACE inhibitor or ARB for left ventricular systolic dysfunction 5100%n/a AMI-4 (CMS) Heart attack patients given smoking cessation advice/counseling 9100%n/a AMI-5 (CMS) Heart attach patients given beta blocker at discharge 4293%7 AMI-8a (CMS) Heart attack patients given PCI within 90 minutes of arrival 0n/a

12. Results for Consumers – Example 3 Readmission Score: 27 Care OutcomeNumber of Patients Risk Adjusted Readmission Quality Points Earned Readmission Measure READM- 30-AMI (CMS) 30-day readmission rate of hospital discharge (heart attack) 6820%4 READM- 30-HF (CMS) 30-day readmission rate of hospital discharge (heart failure) 20627.4%2 READM- 30-PN (CMS) 30-day readmission rate of hospital discharge (pneumonia) 27020.2%0

13. Results for Consumers – Example 4 Total Care Costs, by Payer and Type of Service Number of Discharges Total Costs per Discharge Price Standardized Payments per Discharge Ratio of Total Costs to Standardized Payments per Discharge Total9,015$7,744$8,6670.89 Payer Type Medicare2,366$7,818$8,3120.94 Medicaid632$5,234$6,6070.79 Commercial6,017$8,071$9,2090.88 Service Type Medical6,990$6,567$7,4610.88 Surgical805$20,919$23,0320.91 Newborn1,176$3,215$3,5440.91

14. Challenges Methodology – Scoring / relative vs. absolute ranking – Sufficient measures for scoring – Adequacy of actionable / meaningful measures (process / outcome / functional status?) Completeness and timeliness of data Validation of data by providers Display of results – Platform – Ability to search (dig down / compare) – Context Adequate staffing and funding for analytic intense efforts

15. Next Steps, 2012 Finalizing (revised) first version for confidential review by hospitals Preparing summary information of hospital results Advisory group process informing methodology Performing clinic level analysis Releasing first version for confidential review by clinics Preparing summary information of clinic results Developing public reporting platform with input from stakeholders and consumers Developing second version of hospital data intended for hospital-specific public release

16. Additional information on PPG is available online: www.health.state.mn.us/healthreform/peer/ Information on Minnesota’s health care market can also be found online : www.health.state.mn.us/healtheconomics Contact information: Stefan.Gildemeister@state.mn.us or 651-201-3554 www.health.state.mn.us/ www.health.state.mn.us/healtheconomics Stefan.Gildemeister@state.mn.us 16