1. Regional Variation and Diabetes/Heart Disease Management in California Pay for Performance Tom Williams Executive Director Integrated Healthcare Association CQI: The Right Care Initiative September 29, 2008

2. IHA Sponsored California Pay for Performance (P4P) Program Health Plans: Aetna Blue Cross Blue Shield Western Health Advantage Medical Group and IPAs: 230 groups 35,000 physicians * Kaiser participates in the public reporting only 12 million HMO commercial enrollees CIGNA Health Net of CA Kaiser* United 2

3. Measurement Domain Weighting DomainMY 2003-06* MY 2007 MY 2008 Clinical40 - 50%50%40% Patient Experience30 – 40%30%25% IT Adoption / Systemness 10 - 20%20%15% Coordinated Diabetes Care20% Appropriate Use* * Appropriate use measures to be introduced in 2009 with incentive based upon gain sharing.

4. 4 California Pay for Performance: Performance Results 2003-07 Clinical: continued modest improvement on most measures − 5.1 to 12.4 percentage point increases since inception of measure Patient experience: scores reflect modest over year improvement leveling in 2007 IT-Enabled Systemness: IT measures have shown significant improvement with a lmost one-third of physician groups demonstrating robust care management processes

5. 5 California Pay for Performance: Clinical Performance Variation MY 2006 Results by Region Top Performing Groups Based upon a composite clinical measure score.

6. California Pay for Performance: A Tale of Two Regions Inland Empire Bay Area PCPs/100K Pop. 53116 % Pop. Medi-Cal17% 12% % Hispanic43% 21% Per Capita Income $ 21,733 $ 39,048

7. P4P Performance Score Clinical Performance California Pay for Performance: A Tale of Two Regions

8. Are Quality Variations Correlated with Physician Reimbursement Disparities? The data and subjective experience suggest: Physicians in geographies with low socioeconomics receive disproportionately lower reimbursement across their practice, resulting in diminished physician and organizational capacity, reducing both access and quality of healthcare, even in a uniformly, well-insured population.

9. Coordinated Diabetes Care Measurement 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

10. Clinical Diabetes Measures: Average Rates and Count of Physician Organizations MeasuresMY 2003MY 2004MY 2005MY 2006MY 2007 P4P PO No. of POs Avg No. of POs Avg No. of POs Avg No. of POs Avg No. of POs AvgWgt Avg Nephropathy Monitoring 17271.216873.778.11 HbA1c Screening18465.818169.317773.517275.516878.283.09 HbA1c Poor C ontrol >9 1,2 16862.617756.517249.216850.136.27 LDL Screening17272.316875.680.72 LDL Control <130 1 17740.217245.61684457.53 LDL Control <100 1 17230.216830.239.94 (1) Typically health plan data are incomplete for the lab results measures and PO rates are the most frequently used rates. (2) Lower rates are better for this measure

11. Appendix

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

13. 13 California Pay for Performance For more information: www.iha.org (510) 208-1740 Pay for Performance has been supported by major grants from the California Health Care Foundation