1. Health System Improvement Opportunities In Louisiana: Analysis Through the Lens of Unwarranted Variation June 9, 2008

2. © Health Dialog 2007 2 Effective Care – includes services of proven clinical effectiveness derived from randomized controlled trials (traditionally defined measures of quality) Preference-Sensitive Care – conditions for which treatment options exist that carry significant tradeoffs in terms of risks and benefits for the patient Supply-Sensitive Care – care where the amount given is strongly correlated with health system resource capacity (efficiency) Unwarranted Variation *Dartmouth Atlas of Health Care: http://www.dartmouthatlas.org/agenda.shtm Geographic variation that cannot be explained by illness or need, the dictates of evidence based medicine, or patient preferences*

3. © Health Dialog 2007 3 Project Impetus and Purpose  Louisiana Health Care Redesign Collaborative - strategy for New Orleans and State  The Blue Cross Blue Shield of Louisiana (BCBSLA) Foundation & Tulane – utilize data to inform decisions  Health Dialog – build a multi-payer data warehouse using pre-storm data for benchmarking and analysis

4. © Health Dialog 2007 4 Distribution of Flooding Orleans Neighborhoods (post-storm)  Population decrease of almost 50%  Primary Care Physician decrease of 50%  Hospital inpatient capacity decrease of 80% Health care issues in Louisiana did not start with Hurricanes Katrina or Rita

5. © Health Dialog 2007 5 Data Warehouse: 2.3 Million State Residents, 2005 (pre-storm) Data Warehouse Payer Mix *U.S. Census Bureau (www.census.gov/popest/states/tables/NST-EST2005-01.xls)  2005 total State population: 4.5 million*  Data represents complete Medicare & Medicaid eligibility files –977,000 Medicaid beneficiaries –584,000 Medicare beneficiaries –100,000 Dual-eligibles  Private/BCBSLA data fully-insured book of business –591,000 members

6. © Health Dialog 2007 6 Geographic Units of Analysis 1- New Orleans 9 – Northshore 5 – Southwest 6 – Central 7 – Northwest 8 – Northeast 2- Baton Rouge 3- Houma 4- Acadiana LA Department of Health and Hospital’s health care regions Hospital Service Areas* *Dartmouth Atlas defined empirically derived local health care markets (67 in LA)

7. © Health Dialog 2007 7 Utilization Variation by Region: Population with Chronic Disease – Admits/1,000 *Age & sex adjusted  Average: 750 Admits/1,000

8. © Health Dialog 2007 8 Does chronic disease influence utilization variation?  Diamonds represent Louisiana Hospital Services Areas (HSAs) with ≥ 10,000 people *Chronics: CHF, COPD, Diabetes, Asthma, CAD Natchitoches Bogalusa Variation in Healthcare Utilization for Chronic Disease* & Non-chronic Populations - Children

9. © Health Dialog 2007 9 Does insurance type influence utilization variation?  Diamonds represent Louisiana Hospital Services Areas (HSAs) with ≥ 45,000 people New Orleans Alexandria Variation in Healthcare Utilization by Payer: Admission Rates for Children – Medicaid vs. Private

10. © Health Dialog 2007 10 Does race influence cost variation?  Diamonds represent Louisiana Hospital Services Areas (HSAs) with ≥ 45,000 people  Only Medicare claims data identifies race 1.72x 2.11x Medicare Variation: Impact of Race on Cost

11. © Health Dialog 2007 11 Is there a correlation between cost and quality?  Average Beta blocker use 56%  Average cost $27,000 R² =0.24 Quality & Cost – Beta Blocker Adherence & Annual Expenditures for CAD Patients

12. © Health Dialog 2007 12 Variation in Preference Sensitive Care  The Statewide average is approximately 3/1,000  A 6-fold difference exists between the highest and lowest HSAs  Diamonds represent Louisiana Hospital Services Areas (HSAs) with ≥ 10,000 people Preference Sensitive Care: Back Surgery Rates/1,000

13. © Health Dialog 2007 13 Summary of Findings 1.Prior to Hurricane Katrina, significant geographic variation in utilization, cost, and quality existed within Louisiana  Not due to conditions, payer, race, or gender 2.Higher costs are not correlated with higher quality 3.Significant variation in Preference Sensitive Care exists throughout the State  Local health care system factors play a significant role in Unwarranted Variation –Supply –Idiosyncratic decisions by providers  Louisiana Health Care Quality Forum adopting project as part of mission to help improve quality in the State –Report available at LHCQF.ORG