1. Paying for Quality Health Care: States’ Roles  March 24, 2011  New Hampshire General Court  Concord NH  Ellen Andrews, PhD  Health Policy Consultant  www.csgeast.org

2. Health care spending Sources: National Health Accounts, CMS, accessed 3/20/11, Fiscal Survey of States, NASBO, Fall 2010

3. And it’s going to get worse Sources: National Health Accounts, CMS

4. State spending Sources: National Health Accounts, CMS

5. State spending Sources: National Health Accounts, CMS

6. Quality  Only 39% of American adults are confident that they can get safe, effective care when needed  Americans get only 55% of recommended care on average  Half of Americans report poor coordination of care; especially among those who see more than one doctor  One in three Americans reports getting unnecessary care or duplicate tests.

7. Quality in the region Sources: S. Jencks, et al, Rehospitalizations among Patients in the Medicare Fee-for-Service Program, New England J Med, 4/2/09, Preventable hospitalizations US $30 billion/yr – AHRQ, National CVE meeting, 7/09

8. Quality in the region Sources: 2007 National Survey of Children's Health, http://www.nschdata.org/Content/Default.aspx

9. Quality in the region Sources: 2007 National Survey of Children's Health, http://www.nschdata.org/Content/Default.aspx

10. Quality in the region Sources: 2007 National Survey of Children's Health, http://www.nschdata.org/Content/Default.aspx

12. If it’s not broken, don’t fix it Well, it’s broken Sources: National Health Accounts, CMS

13. Current incentives  Pay the same for unequal quality services  Consumers have no information and no incentive to choose higher quality/higher efficiency service providers  Encourages overuse, misuse of services  Higher spending not correlated with higher quality  Higher spending not correlated with better patient satisfaction

14. Fee-for-service misaligned incentives Fee for service encourages:  More services  Less coordination  Incentives for duplication  Few incentives for prevention  Stifles innovation  Only pays for selected services - not email, group visits, phone calls  No link to quality  Incentives to increase high profit services/patients and avoid low profit

15. Value-based purchasing  Rewards better outcomes  Payments based on quality and efficiency of care  Data driven  Remove incentives for more services  Flexibility for providers to customize care  Reward patient satisfaction  Remove fragmentation and conflicting incentives  Align provider, payer and consumer incentives to reward quality, effectiveness and efficiency

16. Consumers support value-based purchasing  95% of Americans feel it is important to have information about the quality of care provided by different doctors and hospitals  88% feel it is important that they have information about the costs of care to them before they actually get care

17. Federal VBP  Strong feature in national reform  Innovation Center, waivers  ACOs  Comparative effectiveness research  Medicare and Medicaid bundled payment pilots  Medicare  23 programs – P4P, pay for reporting, never events, medical home, gain sharing, removing regulatory barriers, e-prescribing, data aggregation  Premiere Demonstration – hospital P4P  Physician Group Demonstration  Implementing differential payments based on readmission rates

18. Why should states implement VBP?  State employee groups usually one of largest groups in state – 42 states self-insure  Medicaid programs – covers one in five Americans  States regulate insurers, license providers, CON  Trusted source for consumer education, data collection, research  Public health collaborations  Innovators – medical home, HIT, coverage programs  Provider training – promote primary care, emphasis on accountability, transparency  Convener – can get people to the table, anti-trust protections

19. Options: Transparency  Data reporting  Report cards – hospitals, health plans, providers  Coalitions with other payers, providers for joint reporting  All payer data aggregation  State employee, Medicaid reporting  Improve consumer access to information

20. Options: P4P  Widespread, but mixed results  Medicaid P4P in 28 states and growing  Federal Medicaid limits on incentive payments in risk- based systems  Target health plans and/or providers  Coordinate and join with other payers to make payments salient to providers  Outcomes vs. process and teaching to the test/cookbooks  Provider resistance, low Medicaid participation rates

21. Options: Payment system overhaul  Never events  Market share – tier and steer  Shared savings  Episodes of care, bundled payments  Global capitation  Resistance  Barriers

22. Supportive options  Medical home  Accountable care organizations  EMRs, health information exchange  Workforce development, esp primary care  Evidence based medicine

23. Maine value-based purchasing  State employee plan leadership in larger multi-payer collaborative – Maine Health Management Coalition  2005 adopted strategy to encourage consumers to make informed choices, incentives to access higher quality care, reward high quality providers  Hospital and physician tiering by quality, expanded program over the years  Messaging to members, web-based, became a trusted source of information  Engaged providers in development of standards, QI plans  First year diabetes disease management participants averaged $1300 less in health care costs  Transitioning from FFS to bundled payments

24. Lessons from others  Collaborate first  Go slowly  Start small and with strongest partners  Coordinate across payers -- standardize  Fair and open process  Everyone on same page, all have same understanding  Be clear on goals, single-minded dedication  Strong consumer education piece necessary  Plan for transitions  Don’t underestimate the power of disclosure and transparency, often stronger motivator than $$$  Be brave  The time is right for transforming delivery and payment systems – the status quo is not sustainable

25. For more information – www.csgeast.org eandrews@csg.org