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MaineCare Redesign Task Force

September, 2012

Elizabeth MitchellCEO

Maine Health Management Coalition

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Maine Health Management Coalition

www.mhmc.info

The Maine Health Management Coalition Foundation is a public charity whose mission is to bring the purchaser, consumer and provider communities together in a partnership to measure and report to the people of Maine on the value of healthcare services and to educate the public to use information on cost and quality to make informed decisions.

The Maine Health Management Coalition Foundation is a public charity whose mission is to bring the purchaser, consumer and provider communities together in a partnership to measure and report to the people of Maine on the value of healthcare services and to educate the public to use information on cost and quality to make informed decisions.

25 Private Employers5 Public Purchasers

15 Hospitals15 Physician Groups

5 Health Plans

Employers

Health Plans

Providers

Collectively 40% of Comm. Market

The MHMC is a purchaser-led partnership among multiple stakeholders working collaboratively to maximize improvement in the value of healthcare services delivered to MHMC members’ employees and dependents.

The MHMC is a purchaser-led partnership among multiple stakeholders working collaboratively to maximize improvement in the value of healthcare services delivered to MHMC members’ employees and dependents.

MHMC MembersMHMC Members

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quality / outcomes + Value = improved health +

employee satisfactioncost

• Best quality health care• Best outcomes and quality of life• Most satisfaction • For the most affordable cost• For all Maine citizens

MHMC Value Equation

Maine’s Economy Has Moved From Manufacturing to Healthcare

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Maine Jobs in Manufacturing and Health Care, 1990-2010

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Health Care

Maine Has 5th Highest Insurance Premiums in U.S. For Singles

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Average Single Employee Insurance Premiums, 2010Employer Contribution Employee Contribution

Maine

Maine Has 10th Highest Insurance Premiums in U.S. for Families

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Average Family Insurance Premiums, 2010Employer Contribution Employee Contribution

Maine

Premiums ~$650 Above Average:$150-200 Million Excess Costs

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U.S. Avg Single Coverage Premium

Maine Single Coverage Premium

U.S. Avg Family Premium

Maine Family Premium

U.S. Average vs. Maine Insurance Premiums, 2010

Employer Contribution Employee Contribution

$614

$705

More than a Million Preventable Errors & Adverse Events Annually

Medical Error# Errors (2008)

Cost Per Error Total U.S. Cost

Pressure Ulcers 374,964 $10,288 $3,857,629,632

Postoperative Infection 252,695 $14,548 $3,676,000,000

Complications of Implanted Device 60,380 $18,771 $1,133,392,980

Infection Following Injection 8,855 $78,083 $691,424,965

Pneumothorax 25,559 $24,132 $616,789,788

Central Venous Catheter Infection 7,062 $83,365 $588,723,630

Others 773,808 $11,640 $9,007,039,005

TOTAL 1,503,323 $13,019 $19,571,000,000

Source: The Economic Measurement of Medical Errors, Milliman and the Society of Actuaries, 2010

Poor Quality Costs More

On average, the cost of hospital stays for adults who develop health care-associated infections is about $43,000 more expensive2

•Every year 1.7 million people acquire health problems such as bacterial infections and incorrect blood transfusions after arriving at a hospital3—of these, nearly 100,000 die4

•Eighteen types of medical errors account for 2.4 million extra hospital days and $9.3 billion in excess charges each year. 9

2 Agency for Healthcare Research and Quality. Web. 20 Sept. 2011. http://www.ahrq.gov/ news/nn/nn082510.htm.

3 Centers for Disease Control and Prevention. Web. 10 July 2011. http://www.cdc.gov/ncidod/eid/vol7no2/wenzel.htm.

4” United States Department of Health and Human Services. Web. 23 Aug. 2011. http://www.hhs.gov/ash/ohq/.

9"Safe Practices for Better Healthcare". National Quality Forum. Web. 20 Sept. 2011. http:// www.qualityforum.org/News_And_Resources/Press_Kits/Safe_Practices_for_Better_ Healthcare.aspx

Many Procedures Could Be Done for 80-90% Less Than Today

10-Fold Difference

5-Fold Difference

20-25% of Chronic Disease Admits Return Within 30 Days

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PARKVIEW ADVENTIST MEDICAL CENTERST MARYS REGIONAL MEDICAL CENTER

HOULTON REGIONAL HOSPITALAROOSTOOK MEDICAL CENTER,THE

ST JOSEPH HOSPITALHENRIETTA D GOODALL HOSPITAL

CENTRAL MAINE MEDICAL CENTEREASTERN MAINE MEDICAL CENTERMILLINOCKET REGIONAL HOSPITAL

PENOBSCOT VALLEY HOSPITALMAINE MEDICAL CENTER

BLUE HILL MEMORIAL HOSPITALSOUTHERN MAINE MEDICAL CENTER

MAYO REGIONAL HOSPITALMERCY HOSPITAL

MID COAST HOSPITALSTEPHENS MEMORIAL HOSPITAL

INLAND HOSPITALNORTHERN MAINE MEDICAL CENTER

FRANKLIN MEMORIAL HOSPITALMAINE GENERAL MEDICAL CENTER

MILES MEMORIAL HOSPITALRUMFORD HOSPITAL

CALAIS REGIONAL HOSPITALYORK HOSPITAL

CARY MEDICAL CENTERST ANDREWS HOSPITAL

DOWN EAST COMMUNITY HOSPITALREDINGTON FAIRVIEW GENERAL HOSPITAL

WALDO COUNTY GENERAL HOSPITALBRIDGTON HOSPITAL

MAINE COAST MEMORIAL HOSPITALSEBASTICOOK VALLEY HOSPITAL

PENOBSCOT BAY MEDICAL CENTERMOUNT DESERT ISLAND HOSPITAL

Hospital 30-Day Readmission Rates from Heart Failure

Maine Has 3rd Highest Rate of Surgeries in U.S.

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Surgeries Per 1,000 Population, 2008

Maine

But Inpatient Utilization Is Low, Meaning Cost/Day is Higher

Source:CommercialCostVariationbyHospitalReferralRegion,MillimanAugust 2010

Portland

Spending on Physicians is Below Average

Source:CommercialCostVariationbyHospitalReferralRegion,MillimanAugust 2010

Portland

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Potentially Avoidable Complications

"Typical" Care

Even With Low Utilization/Costs,Significant Savings Opportunities

40%+ of low cost in

Maine is“Potentially Avoidable”

Source: Health Care Incentives Improvement Institute

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To meaningfully reduce health care costs will require a fundamental restructuring

of the system. The barriers to improvement are significant- lack of

transparency, accountability, and effective incentives to name a few. New

ways of caring for patients, new payment systems and new roles and

responsibilities for all parties are required if we want a different outcome.

Time to stop ‘rearranging deck chairs’

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1) Performance Measurement and Public Reporting

2) Consumer Engagement

3) Value Based Purchasing

4) Reformed Payment/Effective Incentives

4 Steps to Improving Health Care Value

Meaningful system performance measurement and public reporting is necessary for accountability to purchasers, patients and the community.

•Transparency of cost, resource use and appropriateness

•Transparency of utilization rates and patterns

•Transparency of patient outcomes and experience

•Transparency of quality and safety

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PTE SystemsEmployers/Health Plan Sponsors:

•Christine Burke – MEABT

•Joanne Abate – Delhaize America

•Wayne Gregersen – Jackson Lab

•Thomas Hopkins – U Maine System

•Frank Johnson – State Employee Health and Benefits

•Chris McCarthy, Manager – BIW

Consumers:

•David White, MHMC Foundation Board

•SEHC member

Providers:

•Jeff Aalberg, MD – MMC PHO

•Barbara Crowley, MD – MaineGeneral Health

•David Howes, MD – Martins Point Healthcare

•Jim Kane – CWM PHO

•Donald Krause MD – St. Joseph Hospital

•Jim Raczek, MD - EMMC

Health Plans:

•Bob Downs, Vice President - Aetna

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Aims of Value Based Purchasing

• Drive quality and cost transparency

• Motivate performance improvement

• Incent appropriate utilization

• Reward good performance

• Support fully engaged patients acting like consumers and partners

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Employer Use

• State of Maine Tiered Networks– Hospital based on PTE Metrics - 2006

• Added cost of care w/ quality Aug 2011

– PCPs based on PTE Metrics - July 2007

• Other Employers/Plan Sponsors– Jackson Lab and Barber Foods – January 2011– U Maine System – January 2012– MMEHT – January 2012

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Employer Use

• Employer members choose if/how to use performance measures

• Consistency across employers preferred by providers

• Gradual ‘raising of the bar’ on performance

• Transparent, multi-stakeholder process important to employees and providers

• Threshold: Achieving minimum of ‘Good’ in every category (only quality/safety for 5 years)

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Employer Use

• Exceptions made for ACO pilots: ‘Higher value initiatives’– MaineGeneral - PenBay - EMMC

• Drove provider and employer engagement on delivery system and payment reform

• RFP for direct contracts: Jackson Laboratories

• Network Design: MaineSense

Cost Variation

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Publishing Hospital Costs

How purchasers use the data is what matters:

•Without tiering: Low cost hospitals sought higher rates

•With tiering: High cost hospitals renegotiating lower rates to be included in network (4.7%)

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What Role Do Consumers Play?

“There is a growing recognition that our ability to control costs and improve quality will require an effective partnership with informed and engaged consumers.”

-Dr. Judith Hibbard

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•Lack of good information when they need it: price and quality

•Lack of financial stake in selecting wisely or considering alternatives

•Community and System Support: Even if they get to a high quality provider they often do not have proper support for follow through

If food prices had risen at medical inflation rates since the 1930’s

*Source: American Institute for Preventive medicine

2009

1 dozen eggs $85.08

1 pound apples $12.97

1 pound sugar $14.53

1 roll toilet paper $25.67

1 dozen oranges $114.47

1 pound butter $108.29

1 pound bananas $17.02

1 pound bacon $129.94

1 pound beef shoulder $46.22

1 pound coffee $68.08

10 Item Total $622.27

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Adherence to Quality Indicators

10.5%

22.8%

32.7%

40.7%

45.2%

45.4%

48.6%

53.0%

53.5%

53.9%

57.2%

57.7%

63.9%

64.7%

68.0%

68.5%

73.0%

75.7%

0% 20% 40% 60% 80% 100%

Alcohol Dependence

Hip Fracture

Ulcers

Urinary Tract Infection

Headache

Diabetes Mellitus

Hyperlipidemia

Benign Prostatic Hyperplasia

Asthma

Colorectal Cancer

Orthopedic Conditions

Depression

Congestive Heart Failure

Hypertension

Coronary Artery Disease

Low Back Pain

Prenatal Care

Breast Cancer

Percentage of Recommended Care Received

Quality Shortfalls: Getting it Right 50% of the Time

2004: Adults receive about half of

recommended care

54.9% = Overall care 54.9% = Preventive care 53.5% = Acute care56.1% = Chronic care

Not Getting the Right Care at the Right Time

Source: McGlynn EA, et al., “The Quality of Health Care Delivered to Adults in the United States,” New England Journal of Medicine, Vol. 348, No. 26, June 26, 2003, pp. 2635-2645

Employee engagement curriculum to develop optimal incentives and engage patients in their role to improve their health and healthcare:•Module 1: Examining What You Have, Determining What You Want •Module 2: Bright Spotting: Best Practice Locally, Regionally and Nationally•Module 3: Securing High Quality Healthcare Services•Module 4: Preventing Poor Health•Module 5: Monitoring Your Benefits Package to Assure the Best Value for Benefit Dollars

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Benefit Design Changes AreAlso Critical to Success

ProviderPatient

Payment System

Benefit Design

Ability and Incentives to:•Keep patients well•Avoid unneeded services•Deliver services efficiently•Coordinate services with other providers

Ability andIncentives to:•Improve health•Take prescribed medications•Allow a provider to coordinate care•Choose the highest-value providers and services

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Accountable Benefit Design

Option Explanation/Rationale

Incent Selection of PCP provider in ACO

If primary care is to be foundation of ACO, plan must encourage use of selected practices

Incent PCP visits v. ER visits Establish significant differential to obtain care at PCP or network urgent care

Incent compliance with preventive care

100% coverage or preventive services and age-sensitive screenings linked to health credit

Incent participation in practice based care management

Waive all co-pays for participation in practice based care management for members with chronic conditions

‘I am part of labor representing about 360 members.  My members can not afford a healthcare plan that does not give them the best possible outcome or quality of care. The classes have taught me the buying power of our group. We should not pay for bad results or poor quality of service. As consumers, we need to be more pro-active in our healthcare.’

- City of Portland Employee

‘Before I learned about the work of the Coalition, I thought the only thing I could do about healthcare was complain.’

- Prof. Arthur Hill, UMaine Employee

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MHMC and the City

National Semi

USMUnumHannaford

City of Portland

University of NE

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Employers Pay For:TestsVisits

ProceduresPrescriptions

Errors & Complications

Employers Want:Informed Employees

Improved Outcomes

Care Coordination

Prevention

Functional Status

Return to Work

You Get What You Pay For

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Current Payment Systems Reward Bad Outcomes, Not

Better Health

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Dr. Steele: The Way YOU Pay is a Major Part of the Problem!

Rests on the head…

of a pin

ERLOSE

??

LOSE

LOSE

LOSE

$$

$$

$$$

• It’s not about “risk” or “incentives,” it’s about giving healthcare providers the ability/flexibility to improve outcomes and reduce costs in a way that is financially feasible

• Desired changes in care should drive payment reforms that support them, not the other way around

• Principal Tools:– Episode-of-Care Payment– Risk-Adjusted Global Payment

Payment Reforms Needed that Support Care Changes

Payers Need to Truly Align to Allow Focus on Better Care

Payer

Provider

Payer Payer

PatientPatientPatient

Better Payment System A

BetterPaymentSystem B

Better PaymentSystem C

Even if every payer’s system is better than it was, if they’re all different, providers will spend too much time

and money on administration rather than care improvement

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Data: The Foundation for Improvement

MHMC Database serving as common database with New data partner (HDMS) to greatly enhance access and utility

Timely Multipayor Claims Data (will expand to include clinical) Central Management and Analytic Support through MHMC Desktop access with role-based authorization Better understand the drivers of variation in quality, utilization,

efficiency and cost Evaluate the profile of your employee population to better target

benefits and wellness programs Benchmarks by region/business types

Many Changes in Care Needed to Achieve Significant Savings

Category of SpendingProjectedSpending

Change in Utilization Savings

Advanced Imaging $971,879 -20% ($194,376)ER Utilization $755,969 -15% ($113,395)ACSC Hospitalizations $2,380,536 -40% ($952,214)Back Surgeries $506,451 -10% ($50,645)CABGs $546,673 -10% ($54,667)Other Hospitalizations & SNF $22,052,815 -3% ($661,584)Other Physician Services $13,320,298 0% $0 Other Outpatient Services $4,527,880 0% $0 Home Health, Hospice, & DME $6,437,500 0% 0

$51,500,000 -3.9% ($2,026,882)

Identifying Opportunities and Strategies for Win-Win Savings

• Questions to Address:– Is this a desirable opportunity to pursue?– Does the opportunity vary among regions or among employers?– What are the barriers and how could they be overcome?– What does each stakeholder need to do differently to support

success?

• Employers/Medicaid• Health Plans• Hospitals• Physicians• Consumers/Patients/Families

– What additional information is needed to develop the business case for a win-win-win approach and implement the changes?

As An Example…Priority 1: Reduce Hospital Admissions for People with Chronic Illnesses

Changes Required:• Providers: Improve care transitions; develop PCMH and CCTs; use data

to analyze admissions• Plans: Change reimbursement to reward primary and community based

care including practice-based care management; enhance Rx coverage for patients with chronic illnesses; reduce cost sharing for preventive care; share data

• Patients: Participate in care management and partner with providers• Purchasers: Benefit incentives for participation in care management;

Education and wellness activities for employees with chronic conditions• Others: Public health initiatives to reduce chronic illness

Implications of Reductions: Fewer hospital admissions will require hospitals to reduce staff/infrastructure with community wide economic impact.

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