lawrence casalino: what gp consortia might learn from the us
TRANSCRIPT
What GP Commissioning Consortia might learn from the development of physician groups in the US: a synthesis of 20 years experience to avoid failure
Lawrence Casalino MD, Ph.D.,Livingston Farrand Associate Professor of Public HealthChief, Division of Outcomes and Effectiveness Research
Weill Cornell Medical CollegeWe Co e ed ca Co egeNew York City
The John Fry Lecture Nuffield TrustOctober 18, 2010
Today’s talk
1. Two organizing frameworks for thinking about GP commissioning g gconsortia
2 U S experience with “consortia” and2. U.S. experience with consortia and commissioning
3 Seven theses on GP commissioning3. Seven theses on GP commissioning4. Suggestions from an outsider
Two views of quality
• the individual physician viewthe individual physician view
h i d i• the organized process view
Two types of things that must beTwo types of things that must be created
• incentives• capabilitiescapabilities
f f(i i• performance = f(incentives + capabilities)
Exhibit 12. Premiums Rising Faster Than Inflation and Wages
Projected Average Family Premium as a Percentage of Median Family Income,
2008–2020
Cumulative Changes in Components of U.S. National Health Expenditures and
Workers’ Earnings, 2000–2009
100
125Insurance premiumsWorkers' earningsC P i I d
Percent Percent
108%
18 18 18 1819 19 19
20 2021 21
22 2223
24
1820
25
50
75
Consumer Price Index
1112
1314
1617
10
15
0
25
5032%
24%0
5
9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0
* 2008 and 2009 NHE projections. Data: Calculations based on M. Hartman et al., “National Health Spending in 2007,” Health Affairs, Jan./Feb. 2009;
02000 2001 2002 2003 2004 2005 2006 2007 2008* 2009* 19
99
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Projected
THE COMMONWEALTH
FUND
and A. Sisko et al., “Health Spending Projections through 2018,” Health Affairs, March/April 2009. Insurance premiums, workers’ earnings, and CPI from Henry J. Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits Annual Surveys, 2000–2009.Source: K. Davis, Why Health Reform Must Counter the Rising Costs of Health Insurance Premiums, (New York: The Commonwealth Fund, Aug. 2009).
Exhibit 1. National Health Expenditures per Capita, 1980–2007
$Average spending on health per capita ($US PPP)
7000
8000
United States
6000
7000 CanadaFranceGermanyNetherlands
4000
5000 United Kingdom
2000
3000
0
1000
1980 1984 1988 1992 1996 2000 2004
THE COMMONWEALTH
FUND
Data: OECD Health Data 2009 (June 2009).
1980 1984 1988 1992 1996 2000 2004
Quick summary: history of U SQuick summary: history of U.S. “commissioning”
• Anticipated move to “full-risk” contracting did not occur.
• Most physician organizations created to engage in• Most physician organizations created to engage in risk contracting failed– ~ 2000 IPAs created
200 IPAs successful (at the most)– ~ 200 IPAs successful (at the most) • High profile failures of large fund-holding IPAs.• There is now little or no risk contracting in most of
the U.S.• In California and pockets elsewhere, risk
contracting persists in modified forms.contracting persists in modified forms.
Why did risk contracting failWhy did risk contracting fail, overall, in the U.S.?
• policy failurespolicy failures
i i l f il• organizational failures
Policy failures - failure to:• risk-adjust• balance incentives
h i i d i i d i k i b– physicians and patients perceived risk contracting to be about reducing costs
– not about improving quality or patient experienceid i l i f i• provide timely, accurate, transparent information to
the “consortia”• recognize how difficult it is to build competent g p
physician organizations• reduce incentives for specialists and hospitals to
churn high profit serviceschurn high profit services
Organizational failures - failure to:
• invest in:– physician leaders
kill d– skilled managers– IT– adequate staff (e g nurse care managers)adequate staff (e.g. nurse care managers)
• adequately analyze the level of risk • track IBNR (incurred but not reported)( p )• motivate/coordinate their physicians• gain specialist/hospital cooperationg p p p
Flow of funds? NHSNHS
GP Consortium
Hospital
ConsultantsGPs
Consultants
Thesis 1
It will be extremely difficult to create high-performing GP g p gcommissioning consortia. The government should not expect that g plarge numbers of high performing consortia will be formed overnight, g ,or even within 3-5 years.
Necessary capabilities for GPNecessary capabilities for GP consortia
• leadership• organized processes to improve care (not g p p (
just to commission it)• sophisticated information collecting and
processing– and people with the time and skills do do
thi ith th i f tisomething with the information– sophisticated financial capabilities, including
both accounting and modelingg g
Necessary capabilities for GPNecessary capabilities for GP consortia (more)
• ability to create and manage relationships with many external entities
• ability to pay claims??• a culture of cooperation and quality
improvement– not only within the GP consortium, but
with outside entities as well
Even with perfectly designed incentivesEven with perfectly designed incentives, the risk of failure is high
• inadequate supply of GP leaders• GP consortia likely to underinvest in
management• takes time to develop culture
b diffi lt t i ti• may be very difficult to gain cooperation from consultants and hospitals
• GP consortia will be more like IPAs than• GP consortia will be more like IPAs than multispecialty medical groups or integrated systems
Thesis 2
It will be necessary to create incentives for cooperation at multiple levels within the health care delivery system.
GP i- GP consortium- GP practice/individual GP- consultant/specialist physiciansconsultant/specialist physicians- hospitals- and others
To gain support from rank and fileTo gain support from rank and file GPs:
• GPs must believe that changes will significantly improve some or all of g y pthe following:– quality of care for their patientsquality of care for their patients– quality of their workday– respect from their peersrespect from their peers– physician income
Ways to influence physicians withinWays to influence physicians within an organization
• develop an organizational culture• include only physicians compatible with the desired
cultureculture• educate/persuade/develop guidelines• show physicians in the organization data on:
– the organization’s performance – the performance of practices/individual MDs within the
organization• choose payment methods to reward desired
behavior• require prior approval for certainrequire prior approval for certain
referrals/procedures (for some physicians?)
Thesis 3
Incentives should not focus primarily on generating savings/reducing the g g g gcost of care. They should be balanced among quality, patient g q y, pexperience, and cost-control.
Thesis 4
Incentives should be neither too strong nor too weak.
Should have:
• risk-adjustment• moderate upside and smaller downside risk, p ,
gradually increasing over time– threat to close a consortium not likely to be
h h i b hi ienough when consortium membership is required for GPs
• risk modifiers e g stop loss insurance for• risk modifiers - e.g. stop-loss insurance for outlier patients
Thesis 5
It will be critically important to find ways to foster collaboration among y gGPs, specialist physicians, and hospitals.p
What’s in a name?
• GP Commissioning is likely not an ideal name
• Why not call it “GP Dominance?”• Why not call it GP Dominance?
Other barriers
• basically impossible to form a multispecialty groupp y g p
• incentives not aligned: Payment by• incentives not aligned: Payment by Results
We’ll know the system is workingWe ll know the system is working when:
• GPs and consultants frequently discuss patients on the telephonep p
• Phone conversations often replace• Phone conversations often replace visits to consultants
Thesis 6
Don’t skimp on funds for consortium management!g
Management costs
• critical to have:– skilled clinical and lay leaders– infrastructure support (people and data)– data in itself is useless
th t b l d h l i j b i t• there must be leaders whose only or main job is to help the GP group improve the care provided
• left to themselves, GPs will under-invest in ,management– (at least until they see a reliable ROI)
Thesis 7
• GP commissioning is likely to result in the transfer of a large amount of NHS gfunds to the private sector– (for better or for worse)(for better or for worse)
UK advantages (1)
• “single payer” gives the opportunity to:– collect comprehensive data – risk adjust– balance incentives (cost, quality, patient
i )experience)– invest in the development of physician leaders– invest in management costs in GP consortiainvest in management costs in GP consortia
UK advantages (2)
• public acceptance of GPs
• savings perceived as going to NHS, not to corporate executives andnot to corporate executives and shareholders
UK advantages in developingUK advantages in developing physician leaders
• NHS can pay GP leaders• NHS can provide training for GPNHS can provide training for GP
leaders• NHS can provide an attractive career• NHS can provide an attractive career
track for GP leaders
Suggestions (1)
1. anticipate failures; don’t overinflate expectations for rapid, widespread change b d f d l f2. budget for gradual performance improvement by GP consortia
- provide upside and downside incentives- provide upside and downside incentives - with incentives increasing over time
3. balance incentives: cost, quality, patient , q y, pexperience
Suggestions (2)
5. make it possible for GP consortia to have financial leverage vis-à-vis member physicians/practicesphysicians/practices
6. seek ways to create substantial financial incentives for hospitals and consultants toincentives for hospitals and consultants to cooperate with GP consortia
7. seek ways to make it attractive for consultants to join with GPs in creating multispecialty medical groups
Suggestions (3)
8. provide substantial ring-fenced management funds to GP consortia for 4 years then blend into their budget (and ?years, then blend into their budget (and ? reduce the funds)
9. consider a name other than “GP9. consider a name other than GP commissioning”
10. invest in developing GP and consultant leadership