CHCSCHCSCenter forHealth Care Strategies, Inc.Center forHealth Care Strategies, Inc.

October 28, 2005

Producing and Measuring Quality Health Care For At Risk Kids

Wisconsin Children’s Public Policy Forum

Nikki HighsmithCenter for Health Care Strategies

2

Impetus for ChangeImpetus for Change

3

We Get the Right Care…About ½ of the TimeWe Get the Right Care…About ½ of the Time

Source: McGlynn, et at., NEJM, 2003

56.10%

53.50%

54.90%

54.90%

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

Long TermCare

Acute Care

PreventiveCare

Overall Care

Adherence to Processes Defined as Quality Indicators, By Type of Care

4

Impetus for Change:A Medicaid Growth ScenarioImpetus for Change:A Medicaid Growth Scenario

36M

53M

75M

$133B

$329B

$600B

1995 2005 2015 1995 2005 2015

Beneficiaries

Expenditures

5

Medicaid’s Growth…The Reasons WhyMedicaid’s Growth…The Reasons Why

•Underlying growth in medical costs

•Longevity increases for elderly and people

with disabilities and/or with chronic diseases

•Public coverage expansions (e.g., SCHIP)

•Private coverage decimations (e.g., crowd-in)

6

Medicaid Spending Growth Compared to Private Spending (Holahan, 2005)

Medicaid Spending Growth Compared to Private Spending (Holahan, 2005)

02

46

81012

14

6.9%

9.0%

12.6%

Medicaid Acute Care

Spending Per Enrollee

Health Care Spending Per Person with

Private Coverage

Monthly Premiums for

ESI

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Medicaid: Chaos or Opportunity?Medicaid: Chaos or Opportunity?

•Big Numbers– 52 million people– $320 billion in spending

•Key Challenges– Disproportionate racial and ethnic participation– 80/20

•Increasingly Sophisticated Players– State Purchasers– Managed Care Entities (MCOs, EPCCM)

– Safety Net Providers

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Five Steps for Reducing Medicaid $$Five Steps for Reducing Medicaid $$

Step 4 $$-Driven Desperate Measures

•TBD as states are figuring out that just cutting is not slowing the rate of growth (e.g. TN)

Step 3 Eligibility •Capping enrollment / eliminating optional groups (e.g. MO)

Step 2 Services •Eliminating optional services (e.g. dental)

Step 1 Reimbursement •Across the board provider rate cuts (e.g. OH )

Lev

el o

f D

iffi

cult

y

LOW

HIGHFocus Examples

Step 5 Quality •Chronic disease management

•Outcome based pay for performance

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Medicaid Quality SolutionsMedicaid Quality Solutions

BUILDING BLOCK

EXAMPLE

1. Evidence-Based Practice

New York State is implementing standardized asthma guidelines. Indiana is adopting standardized consensus guidelines for select chronic conditions.

2. Measures/Outcomes

Virginia developed a Managed Care Performance Report to guide improvement efforts. California designed the “Dashboard” report for an “at-a-glance” view of targeted performance measures.

3. Information Technology

Indiana Medicaid developed an electronic patient data registry for the state’s chronic disease management program. Numerous health plans developed asthma registries.

4. Continuous Quality Improvement

More than 150 managed care entities have participated in CHCS’ Best Clinical and Administrative Practices (BCAP) initiative to improve care for targeted groups of consumers. Many states, e.g. Wisconsin and California, are working with health plans to implement and track CQI.

5. Pay for Performance

New York is distributing up to $13 million to plans through its incentive program. Seven plans in California are paying a provider bonus to improve HEDIS well-visit rates for babies and teens. Many states, e.g., Michigan, New Mexico, are using auto-assignment to reward high-performing plans.

6. Care Management North Carolina’s PCCM program assigns nurse care managers to local practices to assist with chronically ill, high-risk patients. Oklahoma, Oregon, Washington, and Pennsylvania have developed requirements for special/exceptional needs coordinators based at the state or health plan level.

7. Integrated Care Commonwealth Care Alliance, a specialized plan for dual eligibles in Massachusetts, uses a comprehensive care coordination approach to address members' physical, behavioral and social needs. Massachusetts, Minnesota and Wisconsin have established comprehensive integrated care programs

8. Consumer Direction

Cash and counseling demonstration programs, e.g., in Arkansas, Florida, and New Jersey, offer preliminary evidence for how consumers might manage their own care. West Virginia Medicaid and other states seek to create health investment accounts that will reward consumers for healthy choices.

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Care Management Trends in MedicaidCare Management Trends in Medicaid

Opportunities

•Create a medical home

•Coordinate/create a continuum of care

•Improve health outcomes/control costs

Challenges

•Choosing a model (HMO, e-PCCM, DMO)

•Communication among interdisciplinary team

•Managing care vs. managing cost

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Care Management Trends: Moving Away from FFSCare Management Trends: Moving Away from FFS

All but three states enroll their members into RBMC, PCCM, or both.*

05

101520253035404550

1990 1994 1996 1998 2000 2002

Risk PCCM Either

# S

tate

s (5

0 +

DC

)

*Trend data adapted from: Kaye, Neva . "Medicaid Managed Care Looking Forward Looking Back." 2005. National Academy for State Health Policy . 08 Jul. 2005 <NASHP.org>.

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Since 1994 over half of all states have enrolled some people with complex needs into a care management model.

0

5

10

15

20

25

30

35

40

Aged SSI children SSI adult

1990

1994

1998

2002

# S

tate

s (5

0 +

DC

)

*Trend data adapted from: Kaye, Neva . "Medicaid Managed Care Looking Forward Looking Back." 2005. National Academy for State Health Policy . 08 Jul. 2005 <NASHP.org>.

Care Management Trends: Moving Into More Complex Populations

Care Management Trends: Moving Into More Complex Populations

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Evidence-Based PracticesEvidence-Based Practices

Opportunities

•Incorporate scientific evidence into practice

•Focus on single diseases (e.g. asthma, diabetes)

•Emerging evidence (e.g. dental care)

Challenges

•Getting research into practice at state, plan, and provider level

•Developing evidence/protocols for treating people with multiple chronic conditions and disabilities

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Pay for PerformancePay for Performance

Opportunities•Use measures and payment system to align

incentives to improve quality•Coordinate measures across P4P programs

and across payorsChallenges•Little research to date on design and

effectiveness•Paying for “what they should be doing

anyway”•Physician concerns re “demoralization” of

field

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Quality Improvement Quality Improvement

Opportunities

•Implement quality improvement collaboratives to drive outcomes

•Use of Best Clinical and Administrative Practices (BCAP) model to design and evaluate programs

Challenges

•Can be resource intensive

•Needs continued and committed leadership on all levels

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Monroe Health Plan of New YorkMonroe Health Plan of New York

NICU Admissions/1000 Births

107.699.4

93.787.7 90.4

53.5

34.9

0

20

40

60

80

100

120

1998 1999 2000 2001 2002 2003 2004

Analysis of NY State SPARCS Data Demonstrated No Concurrent Changes in NICU Admission Rates in Upstate New York for Medicaid During These Years

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Year

NICU

Admits

Live

Births

Projected NICU Costs

(1998 Base)

Actual NICU Costs

NICU Cost

Savings

Aggregate

NICU

Savings

1998 65 604 $ 610,700 $ 610,700 -0- -0-

1999 77 775 $ 779,552 $ 675,499 $ 104,053 $ 104,053

2000 93 993 $ 998,958 $ 729,340 $ 269,618 $ 373,671

2001 100 1140 $ 1,148,600 $ 698,432 $ 450,168 $ 823,839

2002 106 1172 $ 1,175,900 $1, 062,250 $ 113,650 $ 937,489

2003 75 1401 $ 1,406,430 $ 355,322 $ 1,051,108 $ 1,988,597

2004 62 1778 $ 1,791,655 $ 214,564 $ 1,577,091 $ 3,565,688

Medical Costs (NICU)Medical Costs (NICU)

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Year Admin. Costs ($)

No. Live Births

Admin. Costs/ Birth

($)

Incremental Program

Costs/ Birth ($)

Total New Program Costs ($)

Aggregate New

Program Costs ($)

1997 $ 41,300 600 $ 68.83 0 0 0

1998 $ 69,043 604 $ 114.31 $45.48 $ 27,470 $27, 470

1999 $ 106,947 775 $ 138.00 $ 69.17 $ 53,607 $ 81,077

2000 $ 160,053 993 $ 161.18 $ 92.35 $ 91,704 $ 172,781

2001 $ 304,002 1140 $ 266.67 $ 197.84 $ 225,538 $ 398,319

2002 $ 300,857 1172 $ 256.70 $ 187.87 $ 220,184 $ 618,503

2003 $ 397,284 1401 $ 282.57 $ 213.74 $ 299,450 $ 917,953

2004 $ 450,640 1778 $ 253.45 $ 184.62 $ 328,254 $ 1,246,207

Enhanced Prenatal Program CostsEnhanced Prenatal Program Costs

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Does Any of This Make a Difference?

Ratio:(Pre-Program Medical Costs) – (Post-Program Medical Costs)

Program Costs

$3,565,688 = 2.86

$1,246,207

Developing the Return on Investment (ROI)Developing the Return on Investment (ROI)

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Developing the Business Case for Quality in MedicaidDeveloping the Business Case for Quality in Medicaid

• Business Case = direct ROI for Quality Enhancing Initiative (QEI)T Plan A’s asthma QEI with practice site IT reduces ED use

by $10 PMPM over 3-year period.

• Economic Case = ROI $ for other Medicaid stakeholders

T Plan A’s QEI reduces PMPM for other payors when patient

churns elsewhere.• Social Case = broader benefits to society

T Plan A’s QEI increases school/work attendance, quality of life, etc.

Message: we need to find the “win-wins” and align financial incentives to reward quality.

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Score-ability and the Long-term Business CaseScore-ability and the Long-term Business Case

UOMB/CBO methods for scoring need to be changed. For example…maintaining electronic medical records, “would save the Feds billions and save lives as well”…however federal scorers only count the costs of launching the technologies and not the amount that would be saved over time.

Newt Gingrich and Peter FerraraWall Street JournalSeptember 26, 2005