Taking Steps Towards Value-based Purchasing

Healthier Washington Annual SymposiumSeattle

October 18, 2017

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PBGH Members

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Purchaser Approaches to Affordability

High level of concern and frustration re: modest industry efforts

No silver bullet: payment reform is important but not enough

Policy and payment reforms create the ecosystem that encourages delivery system redesign

The most effective interventions include all of:• Payment change• Consumer education and incentives• Information on costs and outcomes• Clinical redesign and quality improvement

Public-private purchaser alignment is critical

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Washington Health Alliance “Seven Things” -Some examples

Centers of Excellence

Reference Pricing

Uniform ACO Metrics

Maternity Transformation

1. Understand your data Yes Yes ? Yes

2. Focus on value, not just cost

Yes ? Yes Yes

3. Demand transparency Yes ? Yes Yes

4. Insist on value in contracting

Yes Yes Yes Yes

5. Manage like supply chain

Yes ? Yes Yes

6. Educate employees Yes Yes ? Yes

7. Join with other purchasers

Yes ? Yes Yes

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Getting value from:

Centers of Excellence (ECEN)

Virginia Mason Medical Center

Seattle, WA

ECEN Centers of Excellence Locations

6

Kaiser Permanente

Irvine Medical Center

Irvine, CA

Mercy Hospital, Springfield

Springfield, MO

Johns Hopkins Bayview

Medical Center

Baltimore, MD

Geisinger Medical Center

Danville, PA

Joints

Spines

Bariatrics

Scripps Mercy Hospital

San Diego, CA

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2014 Employer Outcomes*

Quality Metric Carrier ECEN

Number of Total Joint Replacements (DRG

470)350 231

Discharge to Skilled Nursing Facility 9.1% 0.0%

Readmissions < 30 Days 6.6% 0.4%

Revisions within 6 months 1.1% 0.0%

ECEN Utilization (Joint Replacements 1/1/14 – 08/31/16)

Intakes (unique inquiries): 3958

Referrals to a Center of Excellence: 2293

Completed surgeries: 1372

Intakes:

3958

Referrals: 2293

Completed Cases:

1372

*Data from one participating employer

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$24,578,125

$23,715,125

$22,309,750 $22,216,263

$863,000

$1,405,375

$93,488

$21,000,000

$21,500,000

$22,000,000

$22,500,000

$23,000,000

$23,500,000

$24,000,000

$24,500,000

$25,000,000

Total current spendjoints/spines/bariatric

Savings from competitivebundled pricing

Savings from avoidedinappropriate care

Savings from avoidedcomplications andimproved aftercare

Lower prices

Avoided interventions

Higher quality

New spend

Current spend

Savings

A company of 125K can save >$2M/year (across joints, spines and bariatrics)

Savings for employers and patients

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Getting value from:

Reference pricing (procedures and drugs)

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Reference Pricing - Orthopedics

Source: Robinson JC and Brown TT, “Increases in Consumer Cost Sharing Redirect Patient Volumes and Reduce Hospital Prices for Orthopedic Surgery.” Health Affairs 32(8), 2013, pp. 1392-1397.

Robinson JC et al. N Engl J Med 2017;377:658-665.

Percentage of Prescriptions Written for Lowest-Priced Drugs within Therapeutic Classes (2010–2014).

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Getting value from:

Accountable Care Models

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Employers looking “under the hood”

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Common ACO Performance MeasuresAsthma

1. Asthma Medication Ratio

Cancer Screening

2. Breast Cancer Screening

3. Cervical Cancer Screening

4. Cervical Cancer Overscreening

5. Colorectal Cancer Screening

Cardiovascular

6. Controlling High Blood Pressure

7. Statin Therapy for Patients with Cardiovascular Disease

8. Persistent Beta Blocker Treatment After Heart Attack

9. Ischemic Vascular Disease: Aspirin Use

Depression

10. Screening for Clinical Depression & Follow Up Plan

11. Depression Remission at 6 Months

Diabetes

12. Optimal Diabetes Care Combination

13. Comprehensive Diabetes Care

14. Statin Therapy for Patients with Diabetes

Low Back Pain

15. Use of Imaging Studies for Low Back Pain

Maternity

16. NTSV C-Section

17. Prenatal and Postpartum Care

Respiratory

18. Appropriate Testing for Children with Pharyngitis

19. Avoidance of Antibiotic Treatment of Adults with Acute Bronchitis

Patient Safety

20. Use of Opioids at High Dosage or Concurrent Use of Opioids and Benzodiazepines

Person Centeredness

21. CAHPS, Clinician & Group (ACO)

22. Patient Reported Outcomes

Population Health

23. Adult BMI Screening & Follow Up

24. Childhood Immunization Status: Combo 10

25. Chlamydia Screening in Women

26. Immunizations for Adolescents

27. Initiation & Engagement of Alcohol and Drug Dependence Treatment

28. Tobacco Use: Screening and Cessation Intervention

29. Weight Assessment and Counseling for Children/Adolescents

30. Flu Vaccinations for Adults 18-64

Utilization

31. All Cause Readmissions

32. AHRQ Prevention Quality Indicator #90: Ambulatory Sensitive Admissions

33. ED Visits

34. Potentially Avoidable ER visits

35. Total Cost of Care

BOLD=development/feasibility measure for 2019-2020

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Getting value from:

Maternity care transformation

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Maternity

1st Generation:

blended case-

rate

2nd Generation:

bundled

payment

Purchasers take action!

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Current Thinking of Activist Employers

Shared interest in disruption and accelerating adoption of new payment and delivery models.

Focused on “raising the bar” on performance.

Interested in direct relationship with aligned provider systems.

Investing substantial resources in testing, spreading, and scaling innovation.

Recognize need for multiple, aligned interventions: payment, benefit design, transparency on outcomes, clinical improvement.

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What can a community do?

Agree on priorities and expectations for clinical pathways and performance metrics

Enable the information infrastructure to support accountability and improvement

Help buyers & sellers get organized to focus on shared goals

Honestly evaluate your capabilities and make investments to address shortcomings