1. Benchmark Study of Healthcare Provided by Physician Organizations funded by the California Healthcare Foundation New Directions in Managing Health Care Costs Presentation for: www. Health Web Summit. com Paul M. Katz, MBA Chief Executive Officer Intelligent Healthcare LLC www.intelHC.comwww.intelHC.com (310) 458-6966 December 2002

2. Dec 2002Intelligent Healthcare LLC Slide 2 Purpose … 1 Investigate the use of administrative data (medical claims, medical encounters, eligibility) from delegated/capitated medical groups and IPAs for quality measurement. Often, medical record abstracts are used for quality measurement, which is too expensive for most physician organizations to use, especially when measuring individual physicians.

3. Dec 2002Intelligent Healthcare LLC Slide 3 Purpose … 2 Test medical group/IPA data on some HEDIS, access, and cost measures. For example, evaluate care provided to patients with diabetes: quality, access and cost measures. Look for evidence of efficiencies or inefficiencies in providing evidence based care to these patients.

4. Dec 2002Intelligent Healthcare LLC Slide 4 Purpose … 3 Prevalence of patients with diabetes, patients with asthma, patients with hypertension in the Study population. Underlying risk factors within medical group/IPA patient populations.

5. Dec 2002Intelligent Healthcare LLC Slide 5 Purpose … 4 Establish benchmarks that are meaningful and actionable to physicians, along with the methodology to test themselves on these measures. Encourage self-measurement and self-improvement.

6. Dec 2002Intelligent Healthcare LLC Slide 6 Why Self-Measure … 1 HMOs, State of California Department of Managed Healthcare, Pacific Business Group on Health, National Committee on Quality Assurance, and public advocacy organizations will measure and publish the results on the quality of care of physicians, medical groups and IPAs.

7. Dec 2002Intelligent Healthcare LLC Slide 7 Why Self-Measure … 2 Every medical group and IPA should participate in self-measurement, making changes in processes to improve patient care and quality scores. Healthcare purchase decisions are often based on cost -- no physician or physician organization wants to be known for poor quality scores.

8. Dec 2002Intelligent Healthcare LLC Slide 8 Why Self-Measure … 3 Blue Cross of California established a Physician Incentive Program, paying a bonus to medical groups and IPAs based on the results of several quality measures. The bonus is reportedly between 5% and 10% additional monthly capitation.

9. Dec 2002Intelligent Healthcare LLC Slide 9 Why Self-Measure … 4 Potential of $1 Million for approximately 25,000 capitated/delegated lives.

10. Dec 2002Intelligent Healthcare LLC Slide 10 Why Self-Measure … 5 With IHA’s “Pay for Performance” program, other health plans are starting similar financial rewards based on quality measures applied to services beginning in 2003.

11. Dec 2002Intelligent Healthcare LLC Slide 11 Why Self-Measure … 6 Quality measurement with compensation is here. The medical groups and IPAs should be prepared in advance to use these programs to their advantage.

12. Dec 2002Intelligent Healthcare LLC Slide 12 Benchmark Study… 1 Who’s involved: Study advisory group – health plan and medical group/IPA medical directors, academics, and other interested parties. The list of advisors and other Study information is posted on our web site www.intelHC.com; click on the “benchmark study” button. www.intelHC.com

13. Dec 2002Intelligent Healthcare LLC Slide 13 Benchmark Study… 2 Articles using data for measurement: Steve Asch, M.D. (Rand) Measure conditions with a high prevalence. (The Study includes hypertension for its high prevalence in largely commercial populations.) Steve Campbell, M.D. (University of Manchester UK) Measure processes, or outcomes from processes that physicians have control over.

14. Dec 2002Intelligent Healthcare LLC Slide 14 Benchmark Study… 3 Articles using data for measurement: Paul Newacheck PhD (UCSF) Used data to test differences in access to primary care services between managed care and non-managed care populations. Sheldon Greenfield M.D. (Tufts University) Consider how the population case mix can impact results.

15. Dec 2002Intelligent Healthcare LLC Slide 15 Benchmark Study… 4 Articles using data for measurement: The articles are available on our web site. Under Benchmark Study, click on “Paper: Review of Research…”

16. Dec 2002Intelligent Healthcare LLC Slide 16 Study Methodology Collect data on a statistically significant sample of HMO enrollees. Invitations sent to 110 of the larger delegated/capitated medical groups and IPAs (with at least 35,000 HMO) enrollees. Received 35 responses. Sent out detailed technology surveys, and received 31 completed surveys.

17. Dec 2002Intelligent Healthcare LLC Slide 17 Sample Info Tech Survey

18. Dec 2002Intelligent Healthcare LLC Slide 18 Information Tech Survey… 1 Survey response for MIS systems IDX – 10 OAO – 5 EZCap – 4 Diamond, EPIC, MC2000, Med Manager, & Synertech – 1 each Custom/in-house – 3

19. Dec 2002Intelligent Healthcare LLC Slide 19 Information Tech Survey… 2 Survey response by organization type: IPAs – 20 Medical Groups – 11 Survey response enrollment: 2.5 million lives

20. Dec 2002Intelligent Healthcare LLC Slide 20 Participating Organizations 20 medical groups/IPAs have provided data - no two provided in the same or similar formats. 16 medical groups/IPAs are in the indicator database, following:

21. Dec 2002Intelligent Healthcare LLC Slide 21 Data warehouse… 1 1. Scrubbed the data (including claims, encounter, enrollment, member demographics) and moved it into our data warehouse

22. Dec 2002Intelligent Healthcare LLC Slide 22 Data warehouse… 2 2. Tested the data, calculated per member per month costs by provider specialty, and procedures per 1,000 enrollees against our benchmarks and the other participating medical groups and IPAs to see that their data is substantially complete and enrollment is substantially accurate.

23. Dec 2002Intelligent Healthcare LLC Slide 23 Data warehouse… 3 3. Select members meeting study criteria (2 years of consecutive eligibility with up to one 45 day break). Two years selected to mitigate differences in enrollment turnover rates. Copy into database.

24. Dec 2002Intelligent Healthcare LLC Slide 24 Data warehouse… 4 4. Copy the member’s claims and encounters into the indicator database.

25. Dec 2002Intelligent Healthcare LLC Slide 25 Data warehouse… 5 5. Link the medical group/IPA member number to the health plan assigned member ID, find pharmacy data within each of the 6 pharmacy databases (6 participating HMOs). Copy the member’s pharmacy data to the indicator database.

26. Dec 2002Intelligent Healthcare LLC Slide 26 Data warehouse… 6 6. Look for laboratory test values in the laboratory test value database. Unilab provided data for 5 medical groups/IPAs. 5 medical groups/IPAs reported some data for the Study.

27. Dec 2002Intelligent Healthcare LLC Slide 27 Data warehouse… 7 7. Run each indicator, or part of each indicator for each medical group/IPA.

28. Dec 2002Intelligent Healthcare LLC Slide 28 Flow chart Benchmark Study Indicator Database HMO Rx A DATA WAREHOUSE Groups A, B, C ….. Z HMO Rx B HMO Rx D HMO Rx C INDICATORS Diabetes, Asthma Hypertension

29. Dec 2002Intelligent Healthcare LLC Slide 29 Study Group Population represented in the indicator database (as of today) is drawn from 16 medical groups/IPAs with approximately 1.6 Million HMO enrollees during 2001.

30. Dec 2002Intelligent Healthcare LLC Slide 30 Study groups by enrollment size

31. Dec 2002Intelligent Healthcare LLC Slide 31 Indicator Methodology… 1 Example - Patients with Diabetes: Denominator (per HEDIS specifications) - Patients are identified with diabetes by having one of 4 specifications: Specific prescriptions 1 inpatient admit with diabetes diagnosis 1 ER visit with diabetes diagnosis 2 ambulatory encounters with diabetes diagnosis

32. Dec 2002Intelligent Healthcare LLC Slide 32 Indicator Methodology… 2 Example - Patients with Diabetes: 4 pre-denominator searches of the data for each specification is conducted. The “outer join” of the 4 searches finds the unique member occurrences from any one of the specifications.

33. Dec 2002Intelligent Healthcare LLC Slide 33 Preliminary Findings… 1 Patients with Diabetes (based on the HEDIS specifications) account for approximately 3% of commercial HMO enrollees, and 14% of Medicare HMO enrollees.

34. Dec 2002Intelligent Healthcare LLC Slide 34 Preliminary Findings… 2 For a medical group/IPA with 50,000 commercial enrollees - approximately 1,500 are patients with diabetes. 700 patients among 5,000 Medicare HMO enrollees.

35. Dec 2002Intelligent Healthcare LLC Slide 35 Preliminary Findings… 3 For the numerator of each indicator tested, identify the patients with diabetes having specific services - Eye exams Emergency medical services Hemoglobin A1c lab test Average test value Physician encounters Resources used

36. Dec 2002Intelligent Healthcare LLC Slide 36 Preliminary Findings… 4 Similar processes were followed for patients with asthma and patients with hypertension. Specifications require an “inner join” identifying patients meeting both a pharmacy and medical service specification.

37. Dec 2002Intelligent Healthcare LLC Slide 37 Study Measures… 1 Access measures count the prevalence of patients with specific services (visits), to specific provider types: emergency medicine primary care several medical specialties

38. Dec 2002Intelligent Healthcare LLC Slide 38 Study Measures… 2 A visit is a patient encounter with a provider of a specific specialty on a unique date. Visit counts were assumed to be more consistent across medical groups and IPAs then counting instances of CPT or other service codes.

39. Dec 2002Intelligent Healthcare LLC Slide 39 Study Measures… 3 Utilization measures Obstetrics cardiovascular services radiology scans

40. Dec 2002Intelligent Healthcare LLC Slide 40 Preliminary Results… 1 Patients with Diabetes Eye Exam Completed: Results vary between 15%* and 75%. * missing data or patients with eye exam carve-outs.

41. Dec 2002Intelligent Healthcare LLC Slide 41 Preliminary Results… 2 Patients with Diabetes Hemoglobin Test Rates: Results vary from data missing to 85%.

42. Dec 2002Intelligent Healthcare LLC Slide 42 Preliminary Results… 3 Patients with Diabetes Seen during the year - 65%* to 99% seen by a medical group/IPA provider. * incomplete data likely from capitated primary care physicians.

43. Dec 2002Intelligent Healthcare LLC Slide 43 Preliminary Results… 4 Patients with Diabetes Cost per Patient Per Year to the Medical Group/IPA $1,400 to $2,200 Commercial $2,300 to $5,200 Medicare HMO

44. Dec 2002Intelligent Healthcare LLC Slide 44 Case Mix Medical group/IPA risk for their patient population: With 1.0 the average And a range of 0.9 to 1.1 Equals a potential 22% difference in expected population costs based on age, sex and acuity.

45. Dec 2002Intelligent Healthcare LLC Slide 45 Preliminary Conclusions… 1 All health care organizations have some data problems, and some information reporting limitations. Organization size is not the sole determining factor for the quality of data and information reporting.

46. Dec 2002Intelligent Healthcare LLC Slide 46 Preliminary Conclusions… 2 Incomplete claims/encounter data is a problem for IPAs and medical groups that sub-capitate physicians. Without this data, these organizations will have lower quality scores on some measures

47. Dec 2002Intelligent Healthcare LLC Slide 47 Preliminary Conclusions… 3 Matching data from three different sources (medical claims, pharmacy, laboratory test results) is complicated because of differences in data formats, member/patient ID codes and spelling of patient names.

48. Dec 2002Intelligent Healthcare LLC Slide 48 Preliminary Conclusions… 4 Primary care physicians and medical group/IPA medical director know what evidence based services are necessary for patients with diabetes: periodic physical examinations (blood pressure, weight measurements, and foot exam), hemaglobin, LDL, and microalbuminuria tests, dilated eye exam, and self management training.

49. Dec 2002Intelligent Healthcare LLC Slide 49 Preliminary Conclusions… 5 However, in most physician offices, only when a patient makes an appointment to see a physician will all of these services be provided.

50. Dec 2002Intelligent Healthcare LLC Slide 50 Preliminary Conclusions… 6 The managed healthcare system has been focused on providing faster access to patient demands for services, out of concern that managed care was hindering access to services.

51. Dec 2002Intelligent Healthcare LLC Slide 51 Preliminary Conclusions… 7 To improve quality scores, the medical groups and IPAs will need to learn to better manage and anticipate the care for patients with diabetes, asthma, and cardiovascular diseases, children under age two (for immunizations) and women (for various screenings).

52. Dec 2002Intelligent Healthcare LLC Slide 52 Disease Registry… 1 Intelligent Healthcare is proposing to provide a disease registry care management tool to each of the Benchmark Study participating medical groups and IPAs, and to other interested medical groups and IPAs.

53. Dec 2002Intelligent Healthcare LLC Slide 53 Disease Registry… 2 Uses the methodology from the Benchmark Study, and identifies patients with special needs. Then focuses on a manageable amount of information where it can do the most good for these patients, and the medical group/IPA quality scores.

54. Dec 2002Intelligent Healthcare LLC Slide 54 Disease Registry… 3 The tool will… report patients that are due for evidence based care, or need follow up care. provide reminders to the primary care physician and patients of services that should be provided. identify and share best practice information among physicians.

55. Dec 2002Intelligent Healthcare LLC Slide 55 Disease Registry… 4 The tool will… maintain the links current between medical, pharmacy, and laboratory data. collect necessary medical record information (i.e. blood pressures, weight, etc.) store and report the data that will be needed for quality self-measurement and pay-for-performance.

56. Dec 2002Intelligent Healthcare LLC Slide 56 Intelligent Healthcare LLC Final Benchmark Study Report by November 2002. Disease Registry starting before 2003.