1. Quality & Service Recognition Program A PPO Incentive Program for Quality Richard S. Chung, MD SVP, Health Services Division BCBS of Hawaii (Hawaii Medical Service Association) June 22, 2005

2. Role of Incentives in Healthcare Management Low Risk Moderate Risk High Risk Acute Condition Chronic Disease Catastrophic Illness Primary Prevention Secondary Prevention Tertiary Prevention Health Promotion Preventive Care Self-Care Disease Management Care Management/Utilization Management Performance Management: QSR, EMR, E-Rx, EHR., etc.

3. PPO Program Design Issues

4. Design Issues Solution Patient Centric Analysis

5. I.Quality Indicators Maximum 40 points A. Clinical Measures (25) B. Member Rating (10) C. Board Certification ( 5) Patient Satisfaction Maximum 30 points Business Operations w/HMSA Maximum 15 points A. Hawaii Healthcare Information Network (HHIN) participation ( 5) B. Electronic Media Claims (EMC) participation ( 5) C. Lines of Business with HMSA ( 5) Practice Patterns Maximum 15 points A. Medical Utilization Report ( 5) B. Formulary Compliance Report (10) QSR Distribution of Points Practitioner Quality & Service Recognition Program

6.  Maximum Base Award = $16,000  1.5% -7.5% of the paid professional fees  For Scores <5%, Maximum award of $13,000  Minimum $100 for participation  Improvement Bonus Awards (20% of Ttl QSR Budget)  Clinical Measure (70+ measures)  Member Rating for Outcomes  Member Rating for Satisfaction  Rural Hospital Privileges/On-Call  Electronic Prescribing Technology  Generic Prescribing Rate Above the Mean  Overall, a maximum of $24,000 in Base & Bonus awards can be earned by an individual practitioner. Base & Bonus Monetary Awards Practitioner Quality & Service Recognition Program

7. 1998 2004 Total Awards=$2,165,197$10,650,000 # of Participants=8552,243 Mean Award=$2,532$4,744 Median Award=$1,946$3,565 # of Min Awards=45177 ($150)($100) # of Max Awards=1440 (14 @ $13,000) (26 @ $16,000) Award Payment Summary 1998 - 2004 Practitioner Quality & Service Recognition Program

8. PPO 2004 73.7%

9. After PQSR program implementation, members were more likely to receive recommended care if they visited a QSR participating physician: MeasurePercent Greater Likelihood of Receiving Specified Care Breast Cancer Screening42 % Cervical Cancer Screening52 % Colorectal Cancer Screening13 % ACE Inhibitor Use in CHF51 % Diabetic Retinal Exam38 % Annual HbA1c16 % Use of Long Term Asthma Control Drugs -17 %* Compliance with Antihypertensives -1 %* Compliance with Lipid Lowering Drugs 7 %* MMR Vaccinations -6 %* VZV Vaccinations14 %* Complications Following Cataract Surgery51 %* *Result not statistically significant Individual Measure Logistic Regression Analysis Practitioner Quality & Service Recognition Program