Pay for Performance National Update and Implications for ...

Pay for Performance National Update and Implications for ...

Med Vantage, Inc Sustainable Funding Models for RHIOs Get Connected Knowledge Forum June 28, 2005 Beau Carter Senior Health Policy and Strategy Consultant Med-Vantage 2005 Med-Vantage, Inc. All rights reserved. Proprietary and confidential. May not be reproduced without permission Company Overview Founded 2001, San Francisco corporate office Domain expertise: P4P, Consumer Scorecards, EBM Metrics & Deployment, ROI evaluation, Risk Adjustment First-to-market application, patent pending QualScore - Physician Quality & Cost Decision Support Tool Medical Cost Estimator Treatment Cost and Provider Search Tool EBMScore EBM Measure Construction, ROI & Reporting Tool

Largest consumer quality scorecard deployment underway for CDH/PPO/HMO (Arkansas BCBS) 11 health plan clients (pay-for-performance clients) 200 EBM Measures, 18 specialties (road tested, defensible) National ETG and KPI benchmark data set (50M members) 2005 Med-Vantage, Inc. All rights reserved. Proprietary and confidential. May not be reproduced without permission EB M Pa y fo rP er f

or m an ce (P 4P ) Evidence-Based Physician Scorecard Solutions R es ea rc h Physician Scorecard & Ev al ua

t io n Clinical Informatics 3 IOM Call to Action If we want safer, higherquality care, we will need to have redesigned systems of care, including the use of information technology to support clinical and administrative processes. 4 A First-Year Assessment of RHIOs From David Brailer, MD I think the projects that seem to be making the biggest progress are really focusing on the real nuts and bolts of how they get interoperability to occur. They are also looking at business models and financial alignment. Quoted in Jim Molpus David Brailer's Year of Living Attentively for HealthLeaders News, May 10, 2005

5 IT - Fastest Growing P4P Domain 2004 National P4P Survey P4P Measure Domains Category 2003 n = 28 2004 n = 50 % Total n % Total n Clinical (HEDIS) 89% 25

94% 47 Clinical (non-HEDIS) 46% 13 32% 16 Patient satisfaction 79% 22 56% 28 Efficiency/utilization 57% 16

46% 23 Administrative/market share 54% 15 40% 20 Information technology 39% 11 54% 27 Patient safety 29%

8 12% 6 Other 32% 9 22% 11 2005 Med-Vantage, Inc. All rights reserved. Proprietary and confidential. May not be reproduced without permission 6 IT Incentive Models for Physicians Clinical Information Systems Model Level 1 Connectivity, electronic claims submission, eligibility verification HIP, MVP/Taconic IPA, IBC

Level 2 - Health Plan Based Patient Registry, Care Alerts Priority Health Plan (MI), Horizon BCBS (NJ), BCBS Excellus (Rochester) Level 3 Electronic Prescribing Incentive BCBS-MA, Anthem, MVP/Taconic, Bridges to Excellence (BTE), BCBST Level 3 Basic Patient Registry Use in MD Office, Adoption of EMR Harvard Pilgrim, BTE, Anthem, BCBSMA, IHA, Fallon, BCBS-MI, Dean Health Plan, BCBS-MISS, MVP/Taconic IPA, CareFirst, BCBST Level 4 - Electronic Patient Registries, Systems Non-P4P: BCBS-AL, Group Health for Rx/Tests, EMR, Health Plan Connectivity (lab, Cooperative, Kaiser chart results, Rx) Source: Bridges to Excellence. 2005 Med-Vantage Inc. All Rights Reserved. www.medvantageinc.com 7

But remember, the magic is in not bi-lateral connectivity its in community exchange If interoperability is not solidified and built into EMRs, a generation of investment will be lost, as will an opportunity for fundamental improvement in care delivery? David Brailer, MD February 17, 2005 speech to HIMSS 8 RHIO - Aligning Health Resources with Community Goals Saving s Participation Fee Enrollment Fee Purchasers Payers RHIO Gain Sharing

2004 Jeff Rose, HealthAlliant. All Rights Reserved Community Pool Hospitals & Physicians 9 Financial Barriers to Physician Participation $30,000 - $50,000 -- Client / Server $1,000 per physician per month - ASP model Practice productivity loss Financial ROI favors the payers over providers SOLUTION: Sustainable model built on core funding for the exchange plus financial incentives for physician practice participation 10 PAY-4-PERFORMANCE PAYORS MedAllies Portal EMR 2 E Rx EResults PHYSICIANS

EMR 1 PMS PATIENTS CLINICAL DATA REPOSITORY TRANSLATOR Hospitals Reference Laboratories Pharmacies MASTER PATIENT INDEX Physician Practice Source: A. John Blair III, MD, Taconic IPA 11 THINC Health Information Exchange

12 Incentives for Physician IT Adoption Financial incentives of the approximate range of $3 to $6 per patient visit or $0.50 to $1.00 per member per month appear to be a sufficient starting point to encourage wide-spread adoption of basic EMR technologies by small, ambulatory primary care practices. Work Group on Financial, Legal, and Organizational Stability Connecting for HealthA Public-Private Collaborative June 23, 2004 13 2005 Med-Vantage Inc. All Rights Reserved. www.medvantageinc.com Hudson Valley THINC Flow of IT Adoption Incentive $ $ BTE Employer A Federal/State Government ? Health Plan C

Self-Funded Employer B $ Health Plan D Certification Of Performance Health Plan ASO $ $ $ $ MD MD MD MD MD

MD 14 The Case for Payer Participation in a Collaborative RHIO Incentive Model In most markets, no one payer has enough market share to drive change alone A small investment can produce a large return The broader the participation, the fewer free riders Most e benefits accrue to the payer Some payers could fund physician incentives with Rx savings 2005 Med-Vantage, Inc. All rights reserved. Proprietary and confidential. May not be reproduced without permission 15 There is a Strong Payer ROI in e-Rx Savings By Stakeholder Group 3% 3% 29% 65% Physicians Copyright 2004 Healthvision, Inc. Pharmacies

Payers Gov. Payer 16 . . . and an ROI in EMR Adoption EMR Benefits Chart Pull Transcription Savings Savings Adverse Drug Events Prevention 15% 29% Decreased Billing Errors 5% 5% 13% Increased Billing Capture 14%

Radiology Savings 15% Drug Savings Lab Savings 4% Source: Partners Health Care experience based on 2500 patients and providers. Cost and Benefit Analysis for electronic medical records in primary care. The American Journal of Medicine 2003;114:397-403 17 Physician P4P Model: From 100% IT to 100% Outcomes Phase I Years 1-2 Phase II Years 3-4 Phase III Year 5 on Key Type of P4P P4I (Pay for Infrastructure)

P4U (Pay for Use) P4O (Pay for Outcomes) Desired Behavior Establish & use patient registries Adopt & use eRx system Adopt & use full EMR Perform at EBM best practice levels Key Performance Indicators Use of registries Use of eRx with decision support Use of full EMR Clinical metrics screening/levels Clinical metrics HbA1c, LDL levels; smoking cessation; obesity, hypertension management

IT ( pat. reg. & eRx) 70% Generic Rx 30% IT (EMR) 50% Clinical 50% (screening/levels) Clinical 100% Levels + performance based on chart data Self-report - registry eRx system reports Clinical admin data EMR system reports Clinical admin & lab data Admin. & lab data, plus patient data from EMR Yes-No: registry Two tiers for eRx % use Two tiers for EMR use Two tiers for clinical Two tiers for clinical

Yes-No: smoking, obesity management Up to 10% bonus pmpm or visit add-on Up to 10% bonus pmpm or visit add-on Weighting Data Sources Incentive Formula Incentive Pay-out Up to 10% bonus pmpm or visit add-on 2005 Med-Vantage, Inc. All Rights Reserved. May not be reproduced without permission. 18 And When the Choices Look Like This 19

Do this Do the right thing. It will gratify some people and astonish the rest. Mark Twain 2004 Med-Vantage, Inc. All Rights Reserved. May not be reproduced without permission. 2005 Med-Vantage, Inc. All rights reserved. Proprietary and confidential. May not be reproduced without permission 20 For More Information 2003 - 2004 National P4P Study now available 50 + page White Paper call 415-765-7106 Executive Summary on the web site Beau Carter Senior Health Policy & Strategy Consultant Med-Vantage, Inc. 1 California Street, Suite 2800 San Francisco, CA 94111 (415) 765-7103 www.medvantageinc.com 21

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