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Multi-stakeholder Payment Reform and System Redesign: Working Together to Improve

Healthcare Value

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.

16 Private Employers5 Public Purchasers

21 Hospitals14 Physician Groups

5 Health Plans

Employers

Health Plans

Providers

Collectively 35% 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.

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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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Manufacturing

Manufacturing

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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

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

0% 5% 10% 15% 20% 25% 30%

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

Multiple Cost Drivers Require Multiple Strategies

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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 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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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 - Cary– PenBay - SMMC

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

• RFP for direct contracts: JAX

• Network Design: MaineSense

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Cost Variation

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Publishing Hospital Costs

How the data is used is what matters:

•Without tiering: Low cost hospitals negotiated higher rates

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

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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

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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‘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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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

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

Rests on the head…

of a pin

ERLOSE

??

LOSE

LOSE

LOSE

$$

$$

$$$

Example: Maine’s Transition to Global Payments & ACOs

PURCHASERS PROVIDERSFACILITATORState

EmployeesHealth

Commission and UMS

MaineGeneralHealth

MaineHealth

ManagementCoalition

Bath Iron Works

MidCoastHealthSystem

DataTechnical

Assistance

BestOpportunities forShort-TermSignificantSuccess

Choosing a Starting Point in Moving to Higher-Value Care

ConditionsAffectingMany Patients

ServicesWith Evidence of Over-Utilization

Low-CostInterventionsWith SignificantShort-Term Impact

Willingand AbleClinicalLeadership

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• 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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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?

Who, What and How? Employers

– Patient Incentives through Benefit Design/Wellness– Informed purchasing with performance data – reward high performance– Payment reform – pay for what we value (PCMH)

Providers – High-value, coordinated, patient centered care– Shared Decision Making– Increase primary and effective care/Decrease services of limited value– Transparent cost and quality information

Health Plans – New roles, products and reimbursement systems

Patients – Informed choice and engagement to seek appropriate care– Awareness of risks/benefits with reliable information– Personal health responsibility

Key Next Steps

1. Access and use your data1. Identify key cost drivers

2. Quantify and prioritize opportunities

2. Build partnerships with providers1. Set clear goals with physician leaders to change

care delivery and lower cost

3. Do your part- benefit design/reimbursement changes to support accountable care

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Key Next Steps

4. Expect Accountability1. Review transparent data - monitor impact

2. Reward success

3. If progress is not made, act

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