1. 1 Pay for Performance and Regional Variation Michael J. Belman, MD MPH Anthem Blue Cross (California) Academy Health June 8 2008

2. 2 Introduction Integrated Healthcare Association (IHA) 5 th year of statewide measurement Over 200 groups and IPA,s in the program Incentives from 7 California health plans Clinical quality measures, Patient Satisfaction Survey, and Internal IT Resources Anthem Blue Cross bonus payment for measurement year (MY) 2006 was $69 million, Total bonus for all CA plans > $150m

3. 3 Regional Inequality Clinical Quality North vs. South CA

4. 4 Regional Inequality Patient Satisfaction North vs. South CA

5. 5 Blue Cross of CA HMO Membership Total: 1.4 Million Members 5% 1% 12% 4% 40% 18% 7% 12% SACRAMENTO (2%) % = Percent of Blue Cross HMO members in each region

6. 6 Clinical Quality by Region

7. 7 Patient Satisfaction by Region

8. 8 Regional Performance Metrics Treatment for Children with URI

9. 9 Regional Performance Metrics Breast Cancer Screening

10. 10 Regional Plus Ethnic Disparities

11. 11 IT Implementation Has Impact on Clinical Quality Scores

12. 12 Blue Cross Bonus Awards by Region MY 2004 to MY 2006

13. 13 Change in performance over time

14. 14 Health Disparities and California P4P: Market Statistics (2005 Data) Demo- graphics Riverside San Ber- nardino FresnoSacra- mento San Francisco National Average PCP / 100K53807911686 PCP + SPC / 100K 119171184276207 Hospital Beds / 1000 1.81.61.82.22.7 Source: 2006 HealthLeaders-InterStudy Market Overview

15. 15 Health Disparities and California P4P: A Tale of Two Regions DemographicsInland EmpireBay Area PCPs/100K Pop.53116 % Pop. Medi-Cal17%12% % Hispanic43%21% Per Capita Income$21,733$39,048

16. 16 Inland Empire Performance Metrics Inland Demographics Lower PCP and specialist numbers in Inland Empire compared to California and the nation Lower number of college graduates and higher number with high school education or below Ethnic breakdown amongst insured in San Bernardino County shows –Higher percent African American and Latino –Lower percent Asian and White Lower percent insured in Inland Empire compared to California

17. 17 Impact of Regional Variation on Quality Metrics including NCQA HEDIS CAHPS 58% 65% Source: Danielsen, B. and Damberg, C. (2007) Analysis of the Relative Contributions of Health Plans and Provider Organizations to the 2007 PAS scores. * * * * Blue Cross of California

18. 18 Impact of Regional Variation on US News and World Report (2007) HMO Ranking North East Region WellPoint/Anthem – CT, NH, ME HealthNet – CT Cigna – NH Aetna - CT California WellPoint/Anthem Blue Cross CA HealthNet – CA Cigna – CA Aetna - CA National Plans in Top 35 National Plans 186-216 Healthplan performance largely determined by regional factors (provider network, ethnicity, SES)

19. 19 Persistent and consistent regional variation in performance Low performing regions in general do not improve relative performance Inland Empire has lowest score but Los Angeles County has largest population with low scores Membership has not declined in poor performing groups Regional disparities may adversely impact healthplan HEDIS Current Incentive formula perpetuates disparity in bonus award if only thresholds or rank used to determine bonus Breakthrough improvement may require investment in personnel and infrastructure Conclusions