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Venture Advisory Services Venture Advisory Services © 2008 Venture Advisory Services, All Rights Reserved.© 2008 Venture Advisory Services, All Rights Reserved.
Pay for Performance:Pay for Performance:Have Expectations Have Expectations
Exceeded Outcomes?Exceeded Outcomes?
Pay for Performance:Pay for Performance:Have Expectations Have Expectations
Exceeded Outcomes?Exceeded Outcomes?
A Review of National Trends and Future Directions
Geof Baker, PrincipalVenture Advisory Services
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AgendaAgenda
National Context
Lessons Learned
Release 3.0National Context
2
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39
5 10 6
59
84
6 8 13 7
73
10 725
15
91
160
4
107
148
Other Government MedicaidOnly Plans
Employers CommercialHealth Plans
Total All P4P
Nov-03Nov-04Nov-05Nov-07Nov-09 (Proj)
Growth in P4P Programs by Sponsor Type (2003 -2009E)
Source: Med-Vantage-Leapfrog 2006 National Survey with 2007 Market Updates
Note: For “Other” in 2007, included disease management programs and vendors with P4P incentives under the primary program sponsor (Medicaid) and 10 projected implementations .
P4P Market Adoption Has Matured P4P Market Adoption Has Matured P4P Market Adoption Has Matured P4P Market Adoption Has Matured
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P4P Incentives Extend to All Providers P4P Incentives Extend to All Providers P4P Incentives Extend to All Providers P4P Incentives Extend to All Providers
P4P Program by Provider Type: 2003-2007 Trend
12
6349
108
220
7156
256
1129
52
120
63
2433
129
0
25
50
75
100
125
150
175
200
225
250
275
Specialist Facility PCP Practice Total P4P Programs
Nu
mb
er
of
P4
P P
rog
ram
s
Base (2003) 2004 2005 2007
# of Programs by P4P Sponsor 2007 (n=138), % of Total
60, 43%
49, 36%
29, 21%
1 P4P Program 2 P4P Programs 3 Programs (PCP, Specialist, Facility)
`
Source: Med-Vantage-Leapfrog 2006 National Survey with 2007 Market Updates
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1st Generation (1996-2004)
3rd Generation (2008-2010)
2nd Generation (2005-2007)
Policy National Attention Measure Leadership Performance Measurement & Evidence Stewardship
Growth & Sponsors
•Early Adopters - •Early Majority (Plans – HMO Product)
Late Majority (Plans, CMS, Employers)
• Laggards – Mature• Broad Market Adoption (CMS,
Medicaid)
ROI “Next Wave”, Anecdotal ROI. Focus on UM measures and Rx generic substitution to save $$.
• “Not a Panacea.” Signs of progress: positive clinical improvement with diminishing returns.
• Mixed results from evaluative studies (RWJ, CMS). Confounding factors.
• Cost increases initially for deferred preventative care.
• Achieve dramatic reductions in misuse, overuse, underuse and preventable errors.
• Broad adoption of Erx, generic substitution @70%
• Additional ROI Studies. Adoption of other payment models that complement P4P.
No #, Type of KPIs
≈ 25 measures: PCP HEDIS, utilization, hospital chart, patient experience.
≈ 100 measures: specialty focus, process, structure, safety, HIT adoption, patient experience.
≈ 200 measures composite, outcome, & process measures. HIT adoption, risk adjust, health disparities, multi-disease states.
The P4P Evolution RoadmapThe P4P Evolution RoadmapThe P4P Evolution RoadmapThe P4P Evolution Roadmap
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1st Generation (1996-2004)
3rd Generation (2008-2010)
2nd Generation (2005-2007)
Data Source Claims, chart (hosp) Claims, some lab, Chart (hosp) Enhanced data collection (PQRI, PHR, EHR) + admin data.
Data Aggregation
Minimal Burdensome data collection, some aggregation
Multi-payor, single platforms. clinical data exchanges (HIE). Medical practice integration using IT.
Payment Method and Amounts
• Withhold or Bonus based payouts
• Threshold & ranking based performance
• .5-1% Hospital payout• 2-5% PCP payout
• Differential fee schedules & bonus.
• Threshold based & relative improvement performance
• 1-2% Hospital payout• 2-15% MD payout
• Differential fee schedules, value based payments.
• Relative improvement, exception reviews
• ≥ 10% Hospital & MD payout
Integration with other Initiatives
Stand alone Public reporting, Tiered Networks, HIT adoption
Programs complementing P4P, patient /member incentives & engagement
Reporting Annual retrospective Quarterly retrospective Point-of-care interventions (alerts, reminders)
The P4P Evolution RoadmapThe P4P Evolution RoadmapThe P4P Evolution RoadmapThe P4P Evolution Roadmap
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Pay forPerformance
StandardsInteroperability
Data Aggregation
Tiered Networks
Payment reformValue Based Benefit Design
HIT Adoption- HIE, Erx, EHR
Pay-for-ReportingPay-for-Process- Data Quality
IntegratedCare Management
Public ReportingTransparencyRecognition
Medical HomeProvider EngagementBest Practices
P4P Complements Other InitiativesP4P Complements Other InitiativesP4P Complements Other InitiativesP4P Complements Other Initiatives
7
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Reasons for Implementing P4P ProgramsReasons for Implementing P4P Programs
Using a scale from 1-5, where 1 equals NOT important and 5 equals VERY important
Criteria for Implementing P4PMean2006
(n=62)
Mean2005
(n=60)
Mean2004
(n=50)
Improve patients’ clinical outcomes 4.63 4.36 4.60
Improve member experience (e.g., patient satisfaction)
4.00 N/A N/A
Differentiate in the market, convey positive image
4.00 3.62 3.64
Drive standardization of performance measures
3.93 N/A N/A
Align with other initiatives (e.g., disease management, high performance networks, consumer-directed benefit designs, consumer-directed provider report cards)
3.75 3.57 4.02
Reduce medical errors/improve patient safety
3.63 3.3 3.68
Improve bottom line, lower cost 3.53 3.24 3.28
Improve data collection and reporting from providers
3.53 2.99 3.44
Respond to employer pressures 3.14 2.74 2.87
Source: 2007 Med-Vantage/Leapfrog P4P Survey
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National Context
Lessons Learned
Release 3.0Findings &
Lessons Learned
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Inherent Limitations ….But Here to StayInherent Limitations ….But Here to StayInherent Limitations ….But Here to StayInherent Limitations ….But Here to Stay
Rewards Integrated with Other InitiativesBand-Aid
P4P payments > 10%, frequency to reinforce changeInsufficient Motivation
All payer & aggregated data, uniform platforms with regional exchanges to increase sample size
Critical Mass
Outcomes/composite measures, opportunity areas, CQI culture, engage MDs, assisted interventions
Diminishing Returns
Exception reporting, risk adjustmentGaming
Some +gains, few wind-ups, requires iterations & reengineering, cost of care/outcome measures
ROI Unknown
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Many Use P4P as a Strategy to Achieve ChangeMany Use P4P as a Strategy to Achieve Change
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Inherent Limitations ….But Here to StayInherent Limitations ….But Here to StayInherent Limitations ….But Here to StayInherent Limitations ….But Here to Stay
Relative improvement payout modelsBias
Demographic adjustment requiredHealth Disparities
Value based benefit design, patient health rewards
Quarterly reporting, point-of-care interventions
Patient Accountability
Data integrity, patient attribution, standards, clinical data exchanges, direct data submission, chart data
Latency
Single Source of Truth
Uniform measure sets, coordinated programs, HITBurdensome
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• Direct data submission (supplement claims with collection of
clinical values from registries or EHRs, lab)
• Multiple submission methods (secure sign-on, electronic)
• Standardized data field definitions
• All payer aggregation of admin data (claims, rx)
• Immediate validation / integrity checks
• Auditing and QA (correct coding)
• Help desk and training support,
• Models: IHA, MHQP, BTE, MN, BQI / Charter Value Exchange
• Multiple attribution models - what are the intended purposes?
Data Submission & IntegrityData Submission & Integrity
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National Context
Lessons Learned
Release 3.0Next Generation
Release 3.0
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Changes anticipated in next 2 years to P4P Program2006
Percent(n=46)
2005Percent(n=82)
Expand program to include other products (e.g. PPO, ASO, CDH)
20% 40%
Expand program to include specialists if not doing so now 33% 40%
Expand program to include additional specialties 26% 35%
Expand program to include hospitals if not doing so now 24% 27%
Expand the scope or number of measures used 70% N/A
Change the performance domains or relative weighting 39% 67%
Develop a public performance report 33% 43%
Tie the P4P program more closely to disease management, tiered networks, or benefit design initiatives
33% N/A
Discontinue the program 0% N/A
Other 27% 21%Data Aggregation – Participation in state-wide, collaborative quality initiatives
Data Aggregation – Participation in state-wide, collaborative quality initiatives
Anticipated Changes in P4P ProgramsAnticipated Changes in P4P Programs
Source: Med-Vantage-Leapfrog, 2006 National Survey with 2007 Market Updates
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• CMS is now in business, More $ to incent sustained change
• Strategy to achieve change and sustain CQI
• Going beyond process measures with diminishing returns - Clinical
measure impact must be demonstrable and focused
• Integration with other initiatives - HIT adoption (ERx), Medical Home,
Cost of Care (Are we reducing trends yet?), Health Rewards
• Methodology: full disclosure & open standards (nyrxreport.ncqa.org)
• Physicians acting upon “actionable information” at point-of-care
• Data aggregation, clinical exchange, clinical values, enhanced collection
• Strong push for transparency
Road Ahead: Key Trends for P4PRoad Ahead: Key Trends for P4P
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