Paying for Quality to Improve Patient Safety and Achieve a Value

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Paying for Quality to Improve Patient Safety and Achieve a Value Powered By Docstoc
					          History and Future Outlooks for
                   Hospital P4P


Richard A. Norling
President and CEO
Premier Inc.
Bringing Nationwide Knowledge to Improve Local
Healthcare

                                                       Local healthcare

                                                        Shared goals:
                                                       Better outcomes
                                                      Safely reducing cost

                         Owners                        National alliance
                         Affiliates


 •   Owned by 200 not-for-profit hospitals and health systems
 •   Serving more than 2,100 hospitals and 54,000 other providers
 •   Sharing of clinical, labor and supply chain data for benchmarking
 •   $33 billion in group purchasing volume – largest in U.S.
 •   Highest ethical standards - leading Code of Conduct
 •   Diversity, safety and environmental programs
 •   Recipient of 2006 Malcolm Baldrige National Quality Award
Overview of Premier/CMS P4P project

Premier is leading the first national CMS pay-for-performance demonstration
   for hospitals. More than 260 Premier hospitals participate voluntarily.
 Hypothesis   Financial incentives / transparency improve hospital quality & performance




       Findings
       • Financial incentives did focus hospital executive attention on measuring
         and improving quality.
       • Hospitals performance has improved continuously over time.
    Hospital Quality Incentive Demonstration (HQID)
    Key Facts


•    Three year demo (2003-2006); extended for three additional years through Oct. 2009
•    250 hospitals in 37 states
•    Quality measures
      – First 3 years: 33 nationally recognized measures in five clinical conditions:
           •   Heart attack (Acute myocardial infarction (AMI))
           •   Heart bypass surgery (Coronary artery bypass graft (CABG))
           •   Heart failure (HF)
           •   Community acquired pneumonia (PN)
           •   Hip and knee replacement surgery (Hip/Knee)

      – Second three years: 41 nationally recognized measures in multiple clinical conditions

•    Financial incentives
      – First three years: Top 2 deciles in each condition rewarded; Penalties for hospitals still in
        the bottom 2 deciles in each condition (set in year 2)

      – Second three years: Awards paid for threshold attainment, most improvement, and top
        performer; similar penalty methodology
More Patients Are Reliably Receiving Evidenced-based
Care


                                                                                     Evidence-based Care Improvements
Avg. improvement from
                                                                                                    CMS/Premier HQID Project Participants Appropriate Care Score:
  4Q03 to 2Q08 in all                                                                                 Trend of Quarterly Median (5th Decile) by Clinical Focus Area

     clinical areas                                                                         October 1, 2003 - June 30, 2008 (Year 1, 2, and 3 Final Data; Year 4 and 5 Preliminary)



      (19 quarters)                                            100%




                                                                                                                               96.5%
                                                                                                                               96.0%
                                                                                                                         95.5%
                                                                                        94.4%




                                                                                                                         94.1%
         55.05%




                                                                                        93.8%
                                                                                        93.5%




                                                                                                                        93.3%
                                                                                                                        93.3%




                                                                                                                                                                                                                                                                              92.9%
                                                                                                                             92.7%
                                                                                    92.8%
                                                               90%




                                                                                    92.1%




                                                                                                                        91.7%
                                                                                                                       91.9%
                                                                                                                       91.7%
                                                                                  90.0%
                                                                                  90.0%




                                                                                                                                                                                                                                                                      90.0%
                                                                                                                                                                                                                               89.7%
                                                                                  89.6%




                                                                                                                                                                                                                                                                      89.5%



                                                                                                                                                                                                                                                                           89.3%
                                                                                  88.6%
                                                                                 88.2%




                                                                                                                                                                                                                             87.9%
                                                                                87.8%




                                                                                                                                                                                   87.4%




                                                                                                                                                                                                                                                                     87.1%
                                                                                                                                                                                   87.0%




                                                                                                                                                                                                                                                                          86.9%
                                                                                87.0%




                                                                                                                                                                                  87.0%




                                                                                                                                                                                                                                                                    87.0%
                                                                                                                    86.6%




                                                                                                                                                                                                                                                                    86.2%
                                                                                                                                                                                                                                                                   86.4%
                                                                                                                                                                                                                         86.0%




                                                                                                                                                                                                                                                                   85.9%
                                                                                                                                                                                                                                                                   85.7%
                                                                                                                                                                                                                            85.5%
                                                                                                                                                                                                                         85.2%
                                                                              85.0%




                                                                                                                   84.2%




                                                                                                                                                                                                                                                                                                         84.0%
                                                                                                                                                                                                                                                                                                         84.0%
                                                                                                                                                                                82.7%
                                                                                                                  82.9%




                                                                                                                                                                        82.6%
                                                                                                                                                                        82.8%
                                                               80%




                                                                                                                                                                                                                       82.5%




                                                                                                                                                                                                                                                                81.3%
                                                                            80.9%
                                                                            80.6%
                                                                           80.0%




                                                                                                                                                                                                                     79.2%




                                                                                                                                                                                                                                                               78.6%
                                                                                                                                                                                                                     78.3%
                                                                                                                                                                                                                    78.1%
                                                                                                                                                                            77.1%
                                                                                                               77.3%
  Clinical




                                                                                                                                                                                                                                                                                                     76.7%
                Improvement

                                                                         75.7%




                                                                                                                                                                                                                   75.8%
                                                                       72.7%
                                                               70%




                                                                                                                                                                                                                 72.3%




                                                                                                                                                                                                                                                           72.1%
                                                                      70.7%




                                                                                                                                                                   70.3%
                                                                                                          68.5%




                                                                                                                                                                                                               68.0%
                                                                                                                                                                67.6%
  Area
                                      Appropriate Care Score
                (percentage points)




                                                                                                                                                                                                             64.6%




                                                                                                                                                                                                                                                      63.6%
                                                                                                                                                             62.8%




                                                                                                                                                                                                           62.6%
                                                               60%




                                                                                                                                                            60.9%




                                                                                                                                                                                                         58.5%
                                                                                                                                                        53.8%




                                                                                                                                                                                                      53.8%




                                                                                                                                                                                                                                                 53.6%
                                                               50%
AMI                  23.7%




                                                                                                                                                       50.7%




                                                                                                                                                                                                    50.0%
                                                                                                      48.7%
                                                                                                     45.8%




                                                                                                                                                   44.3%
                                                                                                                                                   43.8%




                                                                                                                                                                                                43.6%
                                                               40%




                                                                                                                                                                                                                                               41.2%
                                                                                                                                                39.0%
CABG                 66.5%




                                                                                                                                              34.7%




                                                                                                                                                                                           34.7%
                                                                                                  34.1%




                                                                                                                                                                                                                                           34.1%
                                                               30%



                                                                                                30.0%




                                                                                                                                          28.0%




                                                                                                                                                                                                                                       27.8%
                                                               20%




                                                                                                                                       22.3%
Pneumonia            65.1%                                     10%


Heart Failure        54.9%                                      0%
                                                                               AMI                             CABG                                          PN                                              HF                                        Hip and Knee                          SCIP

                                                                                                                                                               Clinical Focus Area
Hip & Knee           65.1%
                                                                      4Q03    1Q04    2Q04        3Q04         4Q04       1Q05            2Q05              3Q05                4Q05          1Q06           2Q06          3Q06                4Q06         1Q07         2Q07         3Q07    4Q07
                                                                      1Q08    2Q08
Dramatic and Sustained Improvement

                                                                                         CMS HQID Composite Quality Score
   Avg. improvement
  across all 5 clinical                                                                                  CMS/Premier HQID Project Participants Composite Quality Score:

 areas for median CQS                                                                                      Trend of Quarterly Median (5th Decile) by Clinical Focus Area
                                                                                            October 1, 2003 - June 30, 2008 (Years 1, 2, & 3 Final Data; Years 4 and 5 Preliminary Data)

     (19 quarters)
                                                                     100%
         18.66%




                                                                                                                             99.19%
                                                                                                                             99.01%
                                                                                                                             98.5%
                                                                                             98.54%




                                                                                                                        98.4%
                                                                                                                        98.4%
                                                                                              98.3%




                                                                                                                             98.4%




                                                                                                                                                                                                                                                         98%
                                                                                             98.27%




                                                                                                                        98.3%




                                                                                                                                                                                                                                                       98.1%
                                                                                                                                                                                                                                                      98.16%
                                                                                                                                                                                                                                                       97.9%
                                                                                                                                                                                                                                                       98.0%
                                                                                                                              98%
                                                                                                                            97.8%




                                                                                                                                                                                                                                                 97.9%
                                                                                                                            97.7%




                                                                                                                                                                                                                                                 97.8%
                                                                                             97.6%
                                                                                             97.5%




                                                                                                                                                                                                                                                      97.4%
                                                                                                                                                                                                                                                     97.46%
                                                                                                                                                                                                                                                97.1%
                                                                                            97.0%




                                                                                                                     97.01%
                                                                                       96.8%
                                                                                       96.8%




                                                                                                                      96.8%
                                                                                             97%




                                                                                                                                                                                                                                               96.6%
                                                                     95%




                                                                                      96.1%




                                                                                                                     96.2%
                                                                                      96.0%




                                                                                                                                                                       95.90%




                                                                                                                                                                                                                                            95.92%
                                                                                    95.77%




                                                                                                                                                                                                                      95.38%




                                                                                                                                                                                                                                                                                  95.27%
                                      HQID Composite Quality Score




                                                                                                                                                                                                                                             95.2%
                                                                                    95.1%




                                                                                                                                                                                                                     94.90%
                                                                                                                   94.9%




                                                                                                                                                                     94.85%
                                                                                                                                                                     94.2%




                                                                                                                                                                                                                     94.2%




                                                                                                                                                                                                                                                                                94.11%
                                                                                                                  93.7%
  Clinical




                                                                                                                                                                    93.5%




                                                                                                                                                                                                                    93.4%
                                                                                  93.5%




                                                                                                                                                                    93.4%
                                                                                 93.4%




                                                                                                                                                                                                                                          93.4%
                                                                                                                                                                                                                    93.2%
                Improvement

                                                                                92.5%




                                                                                                                                                                  92.4%




                                                                                                                                                                                                                                                                              92.3%
                                                                                                                                                                   92%




                                                                                                                                                                                                                                        91.6%
                                                                                                                                                                                                                 91.6%
                                                                               91.5%




                                                                                                                                                               91.4%
                                                                     90%




                                                                                                                                                                                                                                       90.9%
                                                                                                             90.6%




                                                                                                                                                                                                                 90%
                                                                                                                                                             90.1%
                                                                            90.0%




                                                                                                                                                                                                              90.0%
                                                                                                                                                                                                              89.9%
                                                                            89.6%




                                                                                                            89.4%
  Area




                                                                                                                                                            89.3%
                (percentage points)




                                                                                                                                                                                                             88.8%




                                                                                                                                                                                                                                    88.7%
                                                                                                                                                           88.5%




                                                                                                                                                                                                          86.7%




                                                                                                                                                                                                                                 86.7%
                                                                                                                                                       86.30%
                                                                     85%




                                                                                                       85.9%
                                                                                                      85.1%




                                                                                                                                                                                                                               85.1%
                                                                                                                                                      84.8%




                                                                                                                                                                                                      84.38%
AMI                    8.9%




                                                                                                                                                                                                     83.0%
                                                                                                                                                   82.7%
                                                                                                                                                   82.5%




                                                                                                                                                                                                   81.6%
                                                                     80%




                                                                                                                                               80.0%




                                                                                                                                                                                               78.2%
                                                                                                                                            78.1%
CABG                  14.1%                                          75%




                                                                                                                                                                                            76.1%
                                                                                                                                          73.1%




                                                                                                                                                                                        73.1%
                                                                     70%
Pneumonia             25.9%




                                                                                                                                      70.0%




                                                                                                                                                                                   68.1%
                                                                     65%

Heart Failure         31.4%




                                                                                                                                                                                64.0%
                                                                     60%


Hip & Knee            13.0%                                          55%
                                                                                      AMI                          CABG                            Pneumonia                                  Heart Failure                           Hip and Knee                  SCIP

                                                                                                                                                            Clinical Focus Area
                                                                                 4Q03    1Q04    2Q04        3Q04         4Q04   1Q05             2Q05           3Q05     4Q05                 1Q06             2Q06      3Q06          4Q06        1Q07   2Q07   3Q07     4Q07
                                                                                 1Q08    2Q08
  In Broader Comparison, HQID Hospitals Excel

                        National Leaders in Quality Performance

• HQID participants avg. 6.5%       HQID hospitals have higher quality ratings* than national hospitals overall
  higher than Non-Participants                                    *CMS process score



• Avg. improvement for HQID
  participants = 7.8%

• Avg. improvement for Non-
  participants = 5.6%

 New England Journal of
  Medicine publication by
  Lindenauer et al. (February
  2007) found that hospitals
  engaged in P4P achieved
  quality scores 2.6 to 4.1
  percentage points above
  other hospitals due solely to
  the impact of P4P incentives.
                                  A composite of 19 measures shared in common between HQID and Hospital
                                     Compare shows P4P hospitals performing above the nation as a whole
Premier Performance Pays Research


                          Premier’s Performance Pays study demonstrated that when evidence-
                          based care is reliably delivered, quality is higher and costs are lower.
                           The recently updated study using all payors and three years of data
                                     (over 1.1 million patients), confirms this result.


                 Study finds higher reliable care yields lower                                       Study finds higher reliable care yields lower
                mortality rates for heart bypass surgery patients                                    hospital costs for patients with pneumonia

                            Mortality Rate for CABG Patients (%)                                              Hospital Costs for Pneumonia Patients
                     6%                                                                              10,000




                                                                            Average Hospital Costs
Mortality Rate (%)




                     4%
                                                                                                      8,000
                     2%


                     0%                                                                               6,000
                             0 to 49%           50 to 74%         75-100%                                        0 to 50%           51 to 99%         100%

                                        Patient Process Measure                                                             Patient Process Measure
Improvement and Savings Over Three Years

  Avg. cost improvement per          Avg. improvement in mortality
patient across all clinical areas      across four clinical areas
                 $1,063                               1.87%

  Clinical Area      Improvement    Clinical Area   Starting   Ending   Improve-
                                                    Score      Score    ment
  Heart Attack            $1,599
  Heart Bypass            $1,579    Heart Attack     8.86%     6.59%     2.27%
  Surgery
                                    Heart Bypass     2.51%     1.55%     0.95%
  Pneumonia               $811      Surgery
  Heart Failure           $1,181    Pneumonia        9.28%     6.89%     2.39%
  Hip Replacement         $744
                                    Heart Failure    4.84%     2.99%     1.86%
  Knee Replacement        $463

           If all hospitals in the nation were to achieve this
 improvement, the estimated cost savings would be greater than
  $4.5 billion annually with estimated 70,000 lives saved per year
International Portability of P4P


UK North West “Advancing Quality”
Program

England’s largest health authority using
Premier/Medicare P4P project as a model
for improving patient care
   –   40 hospitals across the NW region
   –   Measured in five clinical areas
   –   Program initiated on Oct 1
   –   Expected savings = £17M each year in
       reduced LOS, re-admissions
Overview of Advancing Quality


•   Value creation is the objective
•   Measurement is systematic
•   Measurement supports the objective
•   Sound logic underlies each performance measure
•   Selection of measures unambiguous
•   A measurement culture exists
•   Clear rationale for incentive compensation
•   Management encourages open communication of results
•   Measurement system is simple to use
•   Measures processes (inputs) and outcomes
Next-Generation of P4P is QUEST: A Focus on Quality,
Efficiency, Safety, with Transparency

• A collaborative of more than 160 hospitals treating approximately 2.3
  million patients annually, QUEST is designed to help springboard
  hospitals to a new level of performance.

• QUEST is not theory and rhetoric. It’s about benchmarking,
  implementing, measuring and scaling innovative solutions to the
  complex task of caring for patients.

• QUEST’s multidimensional approach is unlike any other attempted.

• QUEST represents a promise for measurable improvements in quality,
  safety and cost of care for patients and shared results to benefit all in
  healthcare.
Optimizing Quality, Efficiency and Safety:
Moving to High Performance Healthcare Delivery
     QUEST Advisory Panel

     •   Agency for Healthcare Research and     •   Institute for Healthcare Improvement
         Quality (AHRQ)                             (IHI)
     •   Alliance for Nursing Informatics,      •   International Center for Nursing
         University of Minnesota                    Leadership University of Minnesota
     •   American Board of Internal Medicine    •   John D. Stoeckle Center for Primary
     •   American College of Surgeons               Care Innovation, Massachusetts
     •   American Health Information                General Hospital
         Management Association                 •   National Business Coalition on Health
     •   American Heart Association             •   National Patient Safety Foundation
     •   American Hospital Association              (NPSF)
     •   American Society for Healthcare Risk   •   National Quality Forum
         Management (ASHRM)                     •   Office of the National Coordinator for
     •   Blue Cross Blue Shield Association         Health Information Technology
         (BCBSA)                                •   The Commonwealth Fund
     •   Centers for Disease Control and        •   The Joint Commission
         Prevention (CDC)                       •   The Rand Corporation
     •   Centers for Medicare & Medicaid
         Services (CMS)


14
Aggressive, Three-Year Improvement Goals


• Save Lives – Achieve a mortality rate that is 17 percent
  less than expected.
• Improve efficiency – Reduce inpatient costs below the
  mid point among participating hospitals.
• Deliver the most reliable and effective care – Deliver
  every recommended evidence-based care measure for
  each patient.
• Improve patient safety (year 2 measure) – Prevent
  incidents of harm in more than 20 categories, including
  healthcare-acquired infections and birth injuries.
• Increase Satisfaction (year 2 measure) – Dramatically
  improve the patient care experience.
QUEST Analysis


• If all QUEST hospitals attained the project’s quality goals
  over the three-year period:
   – Patient mortality could be reduced by 17 percent, or 8,628 lives
     saved a year;
   – Reliability of care could improve by nearly 13 percent, or 22,364
     more patients receiving all evidence-based appropriate care a year.
QUEST Mortality Goal: Move Hospitals over
the Top Performance Threshold (O/E = 0.82)
                Distribution of QUEST Hospitals on Observed vs. Expected Mortality Ratio
                              Baseline-4 Hospitals on O2006 through June 30, 2007 atio 8
                                        UEST
                       Distribution of Q Period: July 1, bserved vs. Expected Mortality R
      -10           -8         -6                -2       0        2        4         6                                                                       10
  0.25


                                                                                                                                 Top Performance
                                                                                                                                  Threshold: 0.82
  0.50




   0.75




   1.00




   1.25




   1.50




   1.75




  2.00




  2.25




  2.50
          *This Distribution Graph shows the range of variation for the Mortality Ratio of the QUEST charter members. Each dot represents one hospital. The
          plotted values are based on rounded values.
Our Mortality Measure and Potential Components
QUEST Baseline Performance Result
Evidence-Based Care (TPT 84%)
         Distribution of QUEST Hospitals on Evidence-Based Care Rates
 100%
                          All-or-None Composite Score

                                                               Top Performance
  90%                                                           Threshold: 84%


  80%




  70%




  60%




  50%




  40%




  30%
Our Evidence Based Care Performance Measure: “All or
Nothing Score”
    QUEST Baseline: Distribution of Hospitals on Total
    Inpatient Cost per Case Mix Adjusted Discharge
                      Distribution of QUEST Hospitals on Total Inpatient Cost per Case Mix Adjusted Discharge                             Distribution of QUEST Hospitals on Total Inpatient Cost per Case Mix Adjusted Discharge
          -10    -8             -6       > 375 Beds +
                                            -4    Teaching and 375 beds or more2
                                                        -2            0                       4           6     8   10
                                                                                                                         $2,000
                                                                                                                               -10   -8             -6     < 375 Beds -
                                                                                                                                                                -4 Teaching and less than 375 beds
                                                                                                                                                                            -2            0            2          4           6     8   10
    $2,000

                                                                                              Top Performance                                                                                                    Top Performance
T   $3,000
                                                                                             Threshold: $6,520
                                                                                                                         $3,000
                                                                                                                                                                                                                Threshold: $5,570
E   $4,000                                                                                                               $4,000

A   $5,000                                                                                                               $5,000

C                                                                                                                        $6,000
    $6,000
H
    $7,000                                                                                                               $7,000
I
                                                                                                                         $8,000
N   $8,000



G   $9,000                                                                                                               $9,000


    $10,000                                                                                                              $10,000


    $1 ,000
      1                                                                                                                    1
                                                                                                                         $1 ,000


    $12,000                                                                                                              $12,000


           -10   -8
                      Distribution of Q
                                -6     > 175 Beds +
                                       UEST Hospitals on Total Inpatient Cost per Case Mix Adjusted Discharge
                                            -4 Non- teaching and 1 0beds or more
                                                        -2          75             2          4           6     8   10         -10   -8                   < 175 Beds -
                                                                                                                                          Distribution of Q
                                                                                                                                                     -6
                                                                                                                                                           UEST Hospitals on Total Inpatient Cost per Case Mix Adjusted Discharge
                                                                                                                                                                -4 Non- teaching and less than 1 beds
                                                                                                                                                                             -2           0       75 2            4           6     8   10
N    $2,000                                                                                                              $2,000

                                                                                             Top Performance                                                                                                    Top Performance
O    $3,000
                                                                                            Threshold: $5,550
                                                                                                                         $3,000
                                                                                                                                                                                                               Threshold: $5,460
N    $4,000                                                                                                              $4,000

T    $5,000                                                                                                              $5,000

E    $6,000                                                                                                              $6,000

A    $7,000                                                                                                              $7,000

C
     $8,000                                                                                                              $8,000
H
     $9,000                                                                                                              $9,000
I
                                                                                                                         $10,000
N   $10,000



G   $1 ,000
      1                                                                                                                    1
                                                                                                                         $1 ,000


    $12,000                                                                                                              $12,000

                                                                                     Baseline Period: July 1, 2006 through June 30, 2007
Our Efficiency Measure (Cost of Care) and Components
Our Harm Measure and Potential Components
Patient Experience: Global Measure Composite
Score
               Distribution of HCAHPS Top Box Global Measures Composite Score
                                QUEST Hospital Compare Facilities
   100.00%
                                         3Q06 - 2Q07
                                                                  Top Q uartile
   90.00%                                                         Threshold: 72%
                                                                  Mean: 68%
   80.00%                                                         Std. Dev: 6.2%
                                                                  N= 1 24
   70.00%



   60.00%



   50.00%



   40.00%



   30.00%



   20.00%



    10.00%



    0.00%
         -10     -8     -6      -4     -2      0      2       4        6           8   10
Our Patient Experience Measure and Potential
Components
 QUEST Participants Show Improvement Through Second
 Quarter 2008 (Preliminary Results)

• 7.98% increase in avg EBC Rate of
  participants from baseline to preliminary
                                                                                                                                                Trend of Average Evidence Based Care Rate
  1q08-2q08 data                                                                                                                                          for QUEST Participants
• 0.11 reduction in the avg Observed to                                                                                                          Baseline and 1q08 Final Data; 2q08 Preliminary Data




                                                                                                         Evidence Based Care Rate (%)
  Expected Mortality Ratio among                                                                                                        100%

  participants from baseline to                                                                                                         80%
                                                                                                                                        60%           77.57%
                                                                                                                                                                             83.81%                   85.55%

  preliminary 1q08-2q08 data                                                                                                            40%
                                                                                                                                        20%
• $297 decrease in the avg Cost of Care for                                                                                              0%

  participants from baseline to preliminary                                                                                                       Baseline (N=153)      Final 1q08 (N=158)    Preliminary 1q08-2q08 (N
                                                                                                                                                                                                        =149 )
  1q08-2q08 data

                                      Trend of Average Cost of Care                                                                        Trend of Average Observed to Expected Mortality
                                         for QUEST Participants                                                                                      Ratio for QUEST Participants
                               Baseline and 1q08 Final Data; 2q08 Preliminary Data                                                               Baseline and 1q08 Final Data; 2q08 Preliminary Data


                      $6,000                                                                           Observed to Expected              1.50
   Cost of Care ($)




                                    $5,831
                                                                                                          Mortality Ratio                1.25
                      $5,500
                                                           $5,585                    $5,534                                              1.00
                      $5,000                                                                                                             0.75           0.99                   0.93                      0.88
                                                                                                                                         0.50
                      $4,500
                                                                                                                                         0.25
                      $4,000                                                                                                             0.00
                                Baseline (N=162)   Preliminary 1q08 (N=155) Preliminary 1q08-2q08 (N                                              Baseline (N=160)    Preliminary 1q08 (N=158) Preliminary 1q08-2q08 (N
                                                                                      =139 )                                                                                                             = 157)
Observations on Collaborative Execution

• Transparency and Healthy Competition is Key
    – Everyone likes being held up as a best performer; no one wants to see
      their institution at the bottom of the list
• Trust in each other and in a partner are critical
    – Data must be credible – not perfect
    – Since the group is entirely open with results, both good and bad, there
      needs to be a trust that information won’t be misused
• Focusing on a “higher purpose” can excite and motivate and makes
  competitive concerns less important
    – By constantly focusing on the improved health of the patient and the
      community, the group engages in true collaboration
• All change is local but some problems are universal
    – We have found a small number of “usual suspects” account for many of
      the avoidable deaths in the population
    – Finding best performers in these problem areas can uncover success
      strategies that can be shared among all participants
  What to Expect From Washington in 2009
               and Beyond


Blair Childs
Senior Vice President,
Public Affairs
Premier Inc.
     2007 and 2008 are additional
     “building” years for quality:                                                                                        AHIC Quality

     continuing past work                                                                   AQA - HQA Steering
                                                                                                                   Workgroup Approved


                                                                   Alliance for Pediatric Committee Formed           Executive Order
                                                                        Quality launched                             Issued on Promoting
                                                                                              Pharmacy               Quality
                                                                                              Quality Alliance
   IOM Report                                                                                 launched
   To Err is                                        Medicare                     Deficit Reduction                         Hospital
                                                    Modernization Act ties       Act mandates                              Compare
   Human:
   Building a Safer                                 hospital market              expansion                                 expanded to
                                                    basket updates to            of measurement                            payment and
   Health System
                                                    quality reporting for        and sets precedent                        volume
                                                    10 measures                  for lack of add-on                        information
                                                                                 payment for errors                        and HCAHPS
                                                                                                                           patient
                                     JCAHO launches                                   IOM Report                           experience
National                             the core measures
Quality Forum                                                CMS Nursing              Performance                          data
                                     initiative              Home Compare            Measurement
constituted
                                                             launched                  Accelerating
                       IOM Report                                                    Improvement                                Value-
                       Crossing the Quality Chasm            Premier                                                            Based
                                                             Hospital Quality           CMS                                     Purchasing
                       • Focused on a redesign of
                                                             Incentive Demo             Roadmap                                 Report to
                          health care delivery
                                                             launched                   to Quality                              Congress on
                       • Called for creation of
                                                                                        launched                                the Plan to
JCAHO                     performance-based
                          payment                            CMS Home              Hospital                                     Implement
launches
                                                             Health                Compare                                      a Medicare
the ORYX
                              Creation of                    Compare               launched                                     Hospital
Initiative
                              The Leapfrog                   launched                                                           VBP
                                                                                     Creation of
                              Group                                                                                             Program
                                                                                     Bridges to
                                                               Hospital              Excellence
                                                                                                                                CMS
                                                               Quality               Ambulatory                                 Preventable
                                                               Alliance              Quality                                    Events
                                                               launched              Alliance
                                                                                     launched


               1990s      2000          2001          2002         2003          2004          2005         2006         2007         2008
Value-Based Purchasing


• Twin tools:

  – Transparency to facilitate patient awareness and
    choice, as well as performance improvement by
    providers; and

  – Differential payment to further incentivize providers
    to change practices, and reduce healthcare spending.
More Quality Measurement

• To get full market basket update for FY 2010:
   –   (1) Surgical Care Improvement Project (SCIP)
   –   (1) Hospital readmissions
   –   (5) Patient Safety Indicators (AHRQ)
   –   (4) Inpatient Quality Indicators (AHRQ)
   –   (1) Cardiac surgery measure (STS)

• Retires pneumonia oxygenation assessment
• Total of 43 quality measures
   – AMI 30-Day Risk Standardized Readmission Measure (Medicare patients)
   – Pneumonia 30-Day Risk Standardized Readmission Measure (Medicare
     patients)
• AMI 30-Day Risk Standardized Readmission & Pneumonia
  30-Day Risk Standardized Readmission Measure
  (Medicare patients) in Final Outpatient Rule
Pride or Prejudice,
Payers Driving Transparency


• May 21 ad to promote the
  Hospital Compare Web site
• CMS ads in 58 major dailies
• Featured hospitals in each
  market and their performance on
  two measures (clinical process
  measure and HCAHPS
  measure)
CMS Publicly Reporting Risk-standardized,
30-day Mortality Measures for AMI, HF and PN

  • The August 20, 2008 posting of mortality measures to Hospital Compare is the second
    annual posting for AMI and HF mortality and the first public reporting for PN mortality.
  • All three measures will be refreshed annually, and hospital-specific reports will be
    distributed to all participating hospitals for each annual preview period.

Display of risk-adjusted
hospital 30-day
mortality rates                                                                                                                          The number of
                                                                                                                                         eligible cases for
                                                                                                                                         each hospital


  An
  estimate of
  the rate’s
  certainty
  (also
  known as
  the interval
  estimate)

  • CMS is contemplating additional changes for displaying 30-day mortality measures.
  Source: CMS Presentation Barry Straube 6/4/2008; Quality Net http://www.qualitynet.org/dcs/ContentServer?cid=1163010398556&pagename=QnetPublic%2FPage%2FQnetTier2&c=
  Page; Hospital Compare; Booz Allen Analysis
Hammer: Hospital-acquired Conditions

•   As of October 1, hospitals will not receive higher payment for:
    1. Object left in during surgery (acute reaction to foreign substance);
    2. Air embolism;
    3.  Blood incompatibility;
    4.  Catheter-associated urinary tract infections;
    5.  Pressure ulcers (Stages III/IV);
    6.  Surgical site infections, e.g., Vascular catheter-associated infections;
    7.  Mediastinitis after coronary artery bypass graft;
    8.  Hospital-acquired falls leading to injuries (including fractures, dislocations,
        intracranial injury, crushing injury and burns).
    9. Venous Thromboembolism after hip and knee replacement*;
    10. Poor Glycemic control (Ketoacidosis & Coma- hypoglycemic &
        hyporosmolar); and
  Hidden Agenda: Government spending on
  healthcare is unsustainable – Impact???
               Total Federal Spending for Medicare and Medicaid Under Assumptions
Percent of GDP                About the Health Cost Growth Differential
     25
                                                   Actual     Projection
                                                                                                                     Tax rates 2050:
                Differential of:
                       2.5 Percentage Points
                                                                                                                     10%       26%
     20
                       1 Percentage Point                                                                            25%       66%
                       Zero                                                                                          35%       92%
     15




     10




      5




      0
       1966   1972   1978     1984   1990   1996   2002     2008   2014    2020   2026   2032   2038   2044   2050


   Healthcare spending as a portion of GDP is projected to take the largest one year
   climb ever from16.6% in 2008 to 17.6% in 2009.                    CMS Actuaries, 2/27/09
Obama FY 2010 Budget proposal
More details in the Spring

•   10-year $1.7 trillion healthcare budget blueprint with few details
     – $630 B “reserve fund” to jump-start health reform efforts
     – Difference of $1 trillion to fund (more $?; more savings?: deficit?; more taxes?)
•   Savings include hospital payment reform (10-yr savings):
     – Hospital P4P programs ($12 billion)
     – Bundled payments for inpatient stay and 30-day post-acute care ($17.6B)
     – Reduce payments to hospitals with high readmission rates ($8.4B)
•   Other proposals contained in the budget:
     – Reform of Medicare physician payment formula, including performance-based
       payments for coordinated care
     – Address financial conflicts of interest in physician-owned specialty hospitals
     – Increase CMS budget to attack fraud, waste and abuse
     – Increase Medicaid drug rebate for brand-name drugs from 15.1% to 22.1% of AMP
     – Prohibit anticompetitive agreements between brand and generic manufacturers
     – $330MM for healthcare providers in medically underserved areas
Rep. Altmire VBP bill – Quality FIRST Act

• Rep. Altmire (D-PA) introduced Quality FIRST Act 9/25/08 (expected to
  reintroduce in 111th Congress)
• Incentive payments based on hospitals’ performance on evidence-
  driven, consensus-based quality measures
   – AMI, HF, PN, SCIP (clinical areas to be expanded in subsequent years)
• Hospitals rewarded for attainment of threshold announced 2 years in
  advance, as well as for improvement
• Establishes reasonable thresholds based on what all hospitals can
  achieve in a realistic timeframe
• Hospitals receive separate scores—and are rewarded—for each
  clinical area, rather than one single score for all measures
• Budget neutral, with up to 2% of hospital payments at stake
Baucus-Grassley VBP Bill Discussion Draft

• Senate Finance Committee Chairman Baucus & Ranking Member
  Grassley released discussion draft of VBP legislation 11/19/08
• Phased in over 5 yrs, beginning in FY 2012
• Incentive payments based on hospitals’ performance on evidence-
  driven, consensus-based quality measures
   – AMI, HF, PN, SCIP, overall patient satisfaction (clinical areas to be
     expanded in subsequent years)
• Hospitals rewarded for attainment of threshold, as well as for
  improvement
• HHS to develop methodology of determining performance score that
  results in appropriate distribution to all hospitals
• Incentive payment applied to all DRGs after 3-yr transition period
• Budget neutral, with 2% of hospital payments at stake, once fully
  phased-in
Thank you
Questions? Comments?


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