POLICY BRIEF – Pay-for-Value in Healthcare & Equity – 1 (of 2 parts)

PBL 891 – Health Policy S.B. Chatterjee

POLICY BRIEF – Pay-for-Value in Healthcare & Equity - I

Agenda

Defining Value in Healthcare

Connecticut Innovation Plan Proposal

Payment, Costs & Delivery Systems

Strategies for Value-based

Alternate Payment Systems

Volume-based to Value-based

Massachusetts – P4P & Equity Lessons Learned✓

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2

3

4

5

6

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Defining ValueIn Healthcare

Mayo Clinic

New England Journal of Medicine

(Swensen, S. et al (2010))

Variables For Which The Provider Is At Risk Under Alternative Payment Systems.

Miller H D Health Aff 2009;28:1418-1428

Miller H D Health Aff 2009;28:1418-1428

How Different Payment Systems Solve Different Cost/Quality Problems.

Miller H D Health Aff 2009;28:1418-1428

Transition In Both The Payment And The Delivery Systems.

Miller H D Health Aff 2009;28:1418-1428

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First Curve to Second Curve MarketsVolume-Based to Value-Based Markets

Source: HRET - Second Curve of Health Care http://www.hpoe.org/resources/hpoehretaha-guides/1360

Second Curve Evaluation Metrics:

SummaryValue-Based Strategies

• Strategy #1: Aligning Hospitals, Physicians and Other

Providers Across the Continuum of Care

• Strategy #2: Utilizing Evidence-Based Practices to

Improve Quality and Patient Safety

• Strategy #3: Improving Efficiency through

Productivity and Financial Management

• Strategy #4: Developing Integrated Information

Systems

Source: HRET - Second Curve of Health Care http://www.hpoe.org/resources/hpoehretaha-guides/1360

Other Must-Do Health Care Transformation

Strategies (Strategies #5-10)

5. Joining and growing integrated provider networks and care

systems

6. Educating and engaging employees & physicians to create

leaders

7. Strengthening finances to facilitate reinvestment and innovation

8. Partnering with payers

9. Advancing an organization through scenario-based strategic,

financial and operational planning

10. Seeking population health improvement through pursuit of the

“Triple Aim” (improving patient experience of care including

quality and satisfaction, improving the health of populations, and

reducing the per capita cost of health care)

Other Value-Based Strategies

Source: HRET - Second Curve of Health Care http://www.hpoe.org/resources/hpoehretaha-guides/1360

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Strategy #1: Aligning Hospitals, Physicians and Other Providers Across

the Continuum of Care

Firs

t-Cu

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M

etric

s

Se

co

nd

-Cu

rve

Metr

ics

• Percentage of aligned and

engaged physicians

• Percentage of physician and

other provider contracts with

quality and efficiency incentives

• Availability of non-acute

services

• Distribution of shared savings /

gains to aligned clinicians

• Number of accountable

covered lives

• Percentage of clinicians in

leadership

• Number of physicians

on staff

• Financial profit and

loss from employed

physicians

• Hospitalist utilization

• Number of contracts

for non-acute services

Strategy #1: Aligning Hospitals, Physicians and Other Providers

Across the Continuum of Care

Source: HRET - Second Curve of Health Care http://www.hpoe.org/resources/hpoehretaha-guides/1360

BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATIONMARCH 2012

Massachusetts –Spends More on Health Care than Any Other State

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PER CAPITA PERSONAL HEALTH CARE EXPENDITURES, 2009

NOTE: District of Columbia is not included.SOURCE: Centers for Medicare & Medicaid Services, Health Expenditures by State of Residence, CMS, 2011.

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

UT AZ GA ID NV TX CO AR CA AL VA SC TN NC OK MS OR KY MI MT NM IN IL KS WA LA HI IA MO WY NE SD OH FL WI MNMD NJ VT WV PA ND NH RI NY DE ME CT AK MA

State

NATIONAL AVERAGE

BLUE CROSS BLUE SHIELD OF MASSACHUSETTS FOUNDATION

Massachusetts –Total Health Spending Will Double from 2009 to 2020

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ACTUAL AND PROJECTED MASSACHUSETTS TOTAL PERSONAL HEALTH CARE EXPENDITURES, 1991-2020(BILLIONS OF DOLLARS)

SOURCES: Centers for Medicare & Medicaid Services, Health Expenditures by State of Residence, CMS, 2011; Massachusetts Division of Health Care Finance and Policy, “Massachusetts Health Care Cost Trends, Historical (1991-2004) and Projected (2004-2020),”November 2009.

$20 $21 $23 $24 $25 $27 $28 $30 $31 $33$36

$39$42

$45$48

$52$56 $58

$61

$68$72

$77$81

$86$92

$97$103

$109

$116

$123

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

ACTUAL PROJECTED

Year

Source: Alberti, et al. Making Equity a Value in Value-Based Health Care - Acad Med. 2013;88:1619–1623.

• Health equity metrics in Pay-for-Performance

• Population diversity – unsupported

assumptions for target hospitals

• Metrics burdensome adding to regular

reporting

• Top-down compliance – ineffective structural

changes

MassachusettsLessons learned for Health Equity

Source: Connecticut Healthcare Innovation Plan

http://www.healthreform.ct.gov/ohri/lib/ohri/sim/plan_documents/ct_ship_2013_12262013_v82.pdf

Connecticut

• Two tracks

– Pay-for-Performance (P4P) – rewards for

quality & care experience

– Shared Savings Program (SSP) - share the

savings

• Alignment of payers to reward structures

tied to common scorecard (of P4P & SSP)

Value-based Payment Proposal

Thank you!

POLICY BRIEF – Pay-for-Value in Healthcare & Equity – 2

Focus on Health Equity