Relationship Between Cost Quality for People with Diabetes in Managed Care Organizations

Understanding Efficiency: Connecting Resource Use & Quality in Diabetes Care – NCQA Early Adopter Pilot Sally Turbyville, MA, MS Assistant Director, Quality Measurement June 4, 2007 Introduction • Affordability of health care has become an overwhelming concern and is threatening to crowd out attention to quality of care. • In part, health plans’ role is to create efficiencies by favorably impacting quality as well as costs/avoidable utilization. • To date NCQA provides little information to assess how well health plans perform in this role. • Changes to overall utilization are key to keeping health care affordable. Academy Health 2007 ARM 2 Health Plans Can Impact Costs Health Plan Functions Results Disease Management Wellness Programs Benefit Design Network Design Reimbursement Policy Utilization Focus Provider Contracting Unit Price/Discount Premium Admin. costs, Strategic considerations, etc Academy Health 2007 ARM 3 Objective of Early Adopter Pilot • Identify health plan variation of quality and cost for adults with diabetes • Two HEDIS Measures – Quality: Comprehensive Diabetes Care – Cost: Relative Resource Use for People with Diabetes Academy Health 2007 ARM 4 Early Adopter Pilot: Methods Confidential & Proprietary Information NCQA RDI* Early Adopter Pilot Academy Health 2007 ARM 5 Sample • Voluntary sample of 25 HMOs and 10 PPOs from across US • Plans calculated results in August-October 2006 • N=31: 2 HMO and 2 PPO plans excluded – HMOs subsidiaries of one national organization; PPOs independent regional organizations • All regions of US – 10 Northeast, 7 West, 4 Midwest, 10 South Academy Health 2007 ARM 6 Quality Measure • Comprehensive Diabetes Care – HEDIS 2006 – Measurement year 2005; administrative method only • Health plan composite rate= unweighted average of: – Annual Cholesterol Test – Annual HbA1c Test – Eye Exam – Monitoring for Kidney Disease • Quality Index calculated – Individual plan composite rate divided by all-plan composite average Academy Health 2007 ARM 7 Cost Measure • RRU for People with Diabetes- HEDIS 2007 – Measurement year 2005; administrative method only • Assess relative cost (i.e., weighted resource use) by service category: • Inpatient facility services (IP) • Surgery & procedure services (Surg) • Evaluation and Management (office visits) services (E&M) • Pharmacy, ambulatory use (Rx) – standardized prices used – Cost is defined as the summarized weighted resource use Academy Health 2007 ARM 8 Cost Measure • Calculated as health plan ratio of observed-toexpected cost – Expected=risk adjusted average • Cost indices calculated – Individual health plan ratio divided by all-plan ratio average for each service category Academy Health 2007 ARM 9 Features of RRU Measurement • Costs are risk adjusted for: – Age – Gender – Presence of co-morbidities – Disease Category (Type 1 or Type 2) • Exclusions of other dominant conditions – Active cancer – HIV/AIDS – ESRD, etc. • Member cost capped if exceeds specified amount • Adjusted for enrollment and pharmacy benefit status (medical and pharmacy member months) Academy Health 2007 ARM 10 Results Confidential & Proprietary Information NCQA RDI* Early Adopter Pilot Academy Health 2007 ARM 11 Variation in IP Facility RDI & CDC N=31 1.7 Diabetes Care: Quality and Cost ▲=HMO ● =PPO 1.5 CDC Index: Composite 1.3 1.1 0.9 0.7 0.5 0.3 1.7 1.5 1.3 1.1 0.9 0.7 0.5 0.3 RDI Index: Inpatient Facility Services Academy Health 2007 ARM 12 Variation in Proc/Surgery RDI & CDC N=31 1.7 Diabetes Care: Quality and Cost ▲=HMO ● =PPO 1.5 CDC Index: Composite 1.3 1.1 0.9 0.7 0.5 0.3 1.7 1.5 1.3 1.1 0.9 0.7 0.5 0.3 RDI Index: Procedure and Surgery Services Academy Health 2007 ARM 13 Variation in E&M RDI & CDC N=31 1.7 Diabetes Care: Quality and Cost ▲=HMO ● =PPO 1.5 CDC Index: Composite 1.3 1.1 0.9 0.7 0.5 0.3 1.7 1.5 1.3 1.1 0.9 0.7 0.5 0.3 RDI Index: Evaluation and Management Services Academy Health 2007 ARM 14 Variation in Total Medical - RDI & CDC N=31 1.7 Diabetes Care: Quality and Cost Diabetes Care: Quality and Cost ▲=HMO ● =PPO 1.5 CDC Index: Composite 1.3 1.1 0.9 0.7 0.5 0.3 1.7 1.5 1.3 1.1 0.9 0.7 0.5 0.3 RDI Index: Total Medical Services Academy Health 2007 ARM 15 Variation in Pharmacy RDI & CDC N=31 1.7 Diabetes Care: Quality and Cost ▲=HMO ● =PPO 1.5 CDC Index: Composite 1.3 1.1 0.9 0.7 0.5 Pearson Corr: r = .513, sig: .003 1.9 1.7 1.5 1.3 1.1 0.9 0.7 0.5 0.3 0.3 RDI Index: Pharmacy Services Academy Health 2007 ARM 16 Summary of Findings • Health plan performance in cost varied more than quality • PPO performance varied more than HMO performance for both quality and cost • No relationship between inpatient facility, E&M, and procedure/surgery cost of services and quality • Pharmacy costs may be related quality Academy Health 2007 ARM 17 Limitations • Sample size small (n=31) • Limited to commercially insured members • HMOs subsidiaries of one national organization; PPOs regional health plans • RRU results not independently audited • Unable to examine if geographic and market affects exist Academy Health 2007 ARM 18 Implications • Preliminary Analyses – More studies needed • Pharmacy may represent a ROI on quality for people with diabetes • No relationship between cost and quality for IP, E&M, Surgery & Procedure services – Higher quality and lower cost may be feasible Academy Health 2007 ARM 19 Discussion/Questions Academy Health 2007 ARM 20