improving the quality of care to reduce health care costs and improve productivity
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Improving the Quality of Care to Reduce Health Care Costs and Improve Productivity. Iowa Health Buyers’ Alliance Annual Conference October 15, 2008 Jim Mortimer [email protected] 773-343-8663. Improving the Quality of Care to Reduce Health Care Costs and Improve Productivity. - PowerPoint PPT PresentationTRANSCRIPT
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Improving the Quality of Care to Reduce Health Care Costs and
Improve Productivity
Iowa Health Buyers’ Alliance Annual Conference
October 15, 2008Jim Mortimer
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Improving the Quality of Care to Reduce Health Care Costs and Improve Productivity
• Estimating the Cost of Poor Quality Health Care– Midwest Business Group on Health 2003– Intermountain Health Care/RTI AHRQ study
2007• Better care costs less
– Information for Iowa from the Dartmouth Atlas of Health Care
– Actions you can take
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Cost of Poor Quality
What is it?
It is an estimate of the total costs of ineffective and inefficient processes and procedures.
Juran Institute
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Second Printing April 2003
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Estimated Cost of Poor Quality Health Care
The Annual Cost of Poor Quality Care Per Covered Employee - 2002
$1,500 Direct Health Care Expense
400 Indirect Cost
$1,900 Total Cost of Poor Quality
MBGH/Juran Report - 2003
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Health Care COPQ Categories
• Overuse
• Underuse
• Misuse
• Other– Administrative Waste– Delays– Service deficiencies
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Example of Overuse: Antibiotics
• Problem: Of 110 million prescriptions written for antibiotics, 40% are unnecessary ($17 million for common cold).
• There is a growing number of organisms resistant to antibiotics (estimated cost is $5 billion annual national cost to treat)
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Example of Underuse:Diabetes Screening
46.7% of adults age 40 and over with diabetes received all three recommended screenings* during 2004 to prevent disease complications
Rate has held constant for three years*HbA1c test, eye exam, foot exam
AHRQ National Healthcare Quality Report 2007 page 40http://www.ahrq.gov/qual/qrdr07.htm
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Example of Misuse : Medical Errors
• Problem: IOM report estimates that 44,000 to 98,000 deaths per year due to inpatient medical errors
• In the USA• Half are preventable• Medication errors alone cause 7,000
deaths per year• Errors cost $17 to 29 billion per year
(half for direct care costs)
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Intermountain Health Care/RTI AHRQ study 2007
122 pages with appendicesVery technical– Not yet published in peer reviewed
journal
Cost of Poor Quality or Waste inIntegrated Delivery System Settings
Final ReportSubmitted to:
Cynthia Palmer, MScAgency for Healthcare Research and Quality
540 Gaither RoadRockville, Maryland 20850
Submitted by:RTI International
3040 Cornwallis RoadP.O. Box 12194
Research Triangle Park, North Carolina 27709Authored by:
Brent James, MD, M.Stat.Intermountain Health Care
36 South State Street, 21st FloorSalt Lake City, Utah 84111-1486
K. Bruce Bayley, PhDProvidence Health System
5211 NE GlisanPortland, Oregon 97213
Contract No. 290-00-0018RTI Project No. 0207897.011
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Cost of Poor Quality or Waste inIntegrated Delivery System Settings
• Overall findings:– 32% of care should not have been undertaken at all –
Overuse– 35% of effort in all care undertaken is “non value-
added”– 56% is conservative cost of poor quality care
• 32% Overuse + 24% NVA (0.35 x 68%) = 56%
– (Does not address misuse, errors and underuse)Email correspondence with Dr. B. James
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Better Care
Better care costs more
Better care costs less
It depends…
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Elimin
ate
Under
use B
A
The Industry Today
The Goal
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Association between Medicare spending and quality ranking -- U.S. States
Baicker and Chandra, Health Affairs, web exclusives W4-184, 7 April, 2004
Minnesota
Illinois
IowaWisconsin
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Atlas Categories of Services
• Effective care: Evidence-based services that all patients should receive. No tradeoffs involved.Acute revascularization for AMI
• Preference-sensitive care: Treatment choices that entail tradeoffs among risks and benefits. Patients’ values and preferences should determine treatment choice.CABG for stable angina
• Supply-sensitive services: Services where utilization is strongly associatedwith local supply of health care resourcesfrequency of MD visits, specialist consultationsuse of hospital or ICU as a site of care
Wennberg, Skinner and Fisher, Geography and the Debate over Medicare ReformHealth Affairs, web exclusives, February13, 2002
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Total Medicare Reimbursements per Enrollee (Part A and B) (2005)
Midwestern Hospital Referral Region Rates (HRRs)
City Name State Rates
Chicago IL 9262.14
Mason City IA 6902.78
Dubuque IA 6889.93
Waterloo IA 6619.47
Minneapolis MN 6442.21
Madison WI 6440.14
Sioux City IA 6379.04
Rochester MN 6375.67
Davenport IA 6258.47
Portland OR 6257.68
Salt Lake City UT 6180.15
Cedar Rapids IA 6043.52
Iowa City IA 5930.74
La Crosse WI 5581.97
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Chicago HRR Inpatient CareMedical and Surgical - 2005
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Des Moines HRR Inpatient CareMedical and Surgical - 2005
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Des Moines and ChicagoSide by Side
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Studies comparing regional differences in spending and the content, quality, and outcomes of care
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Relationships between inpatient reimbursements, volume, and price of care among chronically ill patients during the
last two years of life (2001-05)
R2 = 0.5910,000
15,000
20,000
25,000
30,000
35,000
5.0 10.0 15.0 20.0 25.0 30.0
Hospital days per decedent
Inp
atie
nt
reim
bu
rsem
ents
per
dec
eden
t
R2 = 0.0710,000
15,000
20,000
25,000
30,000
35,000
700 900 1,100 1,300 1,500 1,700
Reimbursements per patient day
Inp
atie
nt
reim
bu
rsem
ents
per
dec
eden
t
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Persistent Intensity Patterns
“…the amount of care given to patients early in the two-year period preceding death was highly correlated with the care intensity during the last six months of life for each individual hospital.” 2008 Atlas Executive Summary – page 11
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Dartmouth Atlas Hospital Specific Data
• Medicare enrollees who died with two or more admissions to the same hospital in a two year period (2001-2005)
• Enrollees with one or more of the following nine chronic conditions:– Congestive Heart Failure, Chronic Lung
Disease, Cancer, Coronary Artery Disease, Renal Failure, Peripheral Vascular Disease, Diabetes, Liver Disease, Dementia
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Hospital Care Intensity IndexIowa Hospital Referral Regions (HRRs)
Hospital Care Intensity IndexThe HCI is based on two variables: • the number of days patients spent in
the hospital and • the number of physician encounters
(visits) they experienced as inpatients.
It is computed as the age-sex-race-illness standardized ratioof patient days and visits. For each variable, the ratio of agiven hospital’s utilization rate to the national average wascalculated, and these two ratios were averaged to createthe index. States, regions, and hospitals with high scoreson this index used inpatient care much more than thosewith low scores. The HCI for regions and hospitals was convertedinto a percentile score calculated according to wherethat region or hospital fell in the ranking of all regions andhospitals for which we had an index estimate. We have calculatedthe percentile ranking so that approximately 1% ofthe hospitals in the database fall into each percentile.Page 110 of 2008 Atlas Report
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Hospital Care Intensity Index
Des Moines HRR
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Dartmouth Atlas of Health CareIowa Area
Hospital Care Intensity Report
For
Iowa Health Buyers AllianceOctober 15, 2008
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Iowa Area Hospital Care Intensity Report
Performance Measure Categories:
• Spending
• Intensity and Utilization
• Capacity
• Quality
53 hospitals measured in the report
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Iowa Area Hospital Care Intensity Report
Five Regions:
• Des Moines and Central
• Sioux City and Northwest
• Iowa City and Northeast
• Quad Cities and Southeast
• Omaha/Council Bluffs and Southwest
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Iowa Area Hospital Care Intensity Report
Data in Four Sections:
1. State Area Rankings
2. Regional Rankings
3. Sample Hospital Profiles
4. Consumer Reports Website Atlas information
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Section 1 State Area Ranks
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35
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Section 3
Hospital Profile
Performance compared to national percentiles of all hospitals
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Section 3
Hospital Profile
Performance compared to national percentiles of all hospitals
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Section 3
Hospital Profile
Performance compared to national percentiles of all hospitals
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Section 3
Hospital Profile
Performance compared to national percentiles of all hospitals
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Section 3
Hospital Profile
Performance compared to national percentiles of all hospitals
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Making Hospital Intensity Data Useful for Patients and Consumers• 2008 Dartmouth Atlas Chapter 4:
Los Angeles, CA case studywww.dartmouthatlas.org
• Consumer Reports – July 2008“Too Much Treatment?” article and Website: www.consumerreports.org/health/doctors-and-hospitals/hospital-home.htm
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Long Beach, CA2008 Dartmouth Atlas – Chapter 4
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Medicare spending, resource inputs, and care intensity among hospitals in Long Beach, CA
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Consumer Reports
Compare Hospitals for Chronic Care page www.consumerreports.org/health/doctors-and-hospitals/hospital-home.htm
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Consumer Reports
Compare Hospitals for Chronic Care page www.consumerreports.org/health/doctors-and-hospitals/hospital-home.htm
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Actions you should take
• Compile your data– Claims data from your carriers on cost and quality problem
drivers. Estimate cost of poor quality– Dartmouth Atlas www.dartmouthatlas.org – AHRQ NHQR and State Snapshots
http://statesnapshots.ahrq.gov – Commonwealth Fund State Scorecard data www.cmwf.org – Health Plans HEDIS measures– Local Coalition information –IHBA and HPCI– NBCH “eValue8” health plan performance survey www.nbch.org
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Actions you should take
• Work with coalitions, carriers and consultants to identify interventions that should have positive ROI for identified problems
• Publish data for use and education of employees and the public
• Work with carrier/health plan to pioneer payment incentives for providers and benefit incentives for covered populations
• Educate employees and the public to avoid errors and to self-manage chronic conditions
• Join with other public and private employers to share problems identified in your/their data/experience and the work of implementing interventions at the community level.
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The New York Times 6/14/07Reed Abelson
“In Health Care, Cost Isn’t Proof of High Quality”• Pennsylvania Health Care Cost Containment Council Report:
“Cardiac Surgery in Pennsylvania 2005” www.pch4.org • Heart bypass surgery payments to hospitals vary between $20,000
and $100,000• Comparable length of stay and mortality rates for high and low-paid
hospitals• Two of highest paid hospitals had higher than expected death rates.• One of the best performing hospitals was paid an average of
$33,549: less than half of the $80,000 average for the 60 hospitals studied
• “Certain payers are paying an awful lot for poor quality” Marc Volavka, Executive Director, Pennsylvania Health Care Cost Containment Council