1. TRI science addiction USING PERFORMANCE AND OUTCOME MEASURES Mady Chalk, Ph.D. Treatment Research Institute Summit on Performance and Outcome Measurement March, 2008

2. TRI science addiction CONTEXT Performance-based contracting is part of a continuum of purchaser-provider payment relationships: –Informal agreements re: services, target populations –Grants (basic operating grants, training grants)

3. TRI science addiction CONTEXT (con’t) As we said at the last summit, performance contracts: –Specify results, service delivery targets, population served –Include indicators by which results are measured –Spread financial risk between the purchaser and the provider

4. TRI science addiction CONTEXT (con’t) Performance contracting is a health reform strategy that uses 3 levers: –Provider payment –Organizational change –Regulation Aims to improve efficiency, quality, access, sustainability

5. TRI science addiction Power of Performance Measurement There is a link between effective performance measurement and successful service results. Performance measurement is NOT simply a safeguard; it is an incentive mechanism and a delivery tool. There is no “one fits all” approach to using performance measures for different services.

6. TRI science addiction WHAT DO YOU NEED TO KNOW? 1.What do you want to improve: access, for specific groups or services? 2.What are your targets: clinical treatment programs, specific population, continuum of care, recovery support services

7. TRI science addiction WHAT DO YOU NEED TO KNOW? 3.What will be your measures: depends on objectives; can be process of care; can be health status outcomes 4.What will be your monitoring, evaluation and enforcement plan: frequency, criteria, rewards and penalties

8. TRI science addiction WHAT DO YOU NEED TO KNOW? 5.What will be your pricing method: fixed prospectively, retrospective adjustment 6.What will be your payment mechanism: budget, unit cost, capitation, by case, by activity

9. TRI science addiction DEVELOPING MEASURES Performance measures need to be developed with clear reference to practical service considerations AND in consultation with operational experts, i.e. providers Operational staff need to be routinely consulted about the design of a performance measurement, monitoring, and (ultimately) contracting program.

10. TRI science addiction WHEN MEASUREMENT WORKS Understanding the service needs and model, clinical and business processes, what is required to get from A to B More measures and increased complexity do not necessarily lead to better service results Financial reward is not the only incentive Good partnership based on shared objectives The right bid criteria

11. TRI science addiction IMPLEMENTATION Management Monitoring, evaluation, and “tweaking” Enforcement: who does it, when and how Who loses, who gains, too much, too little

12. TRI science addiction CONDITIONS AFFECTING SUCCESS Where capacity is weak, might –Start with non-clinical services to gain experience –Start with outpatient services before detox –Start with a geographic area where more providers exist Where capacity is strong, –Pay attention to more modest increase in skills needed to implement changes at the provider level

13. TRI science addiction CONDITIONS AFFECTING SUCCESS Developing and transferring best practice performance measurement and contract designs: case studies, evaluations Developing procurement and contract management skills at all levels Involvement of operational experts (providers) early in the process Flexibility: allow room for innovation