Value-Driven Healthcare: A Federal Priority

1. Value-Driven Healthcare:A Federal Priority Barry M. Straube, M.D. Centers for Medicare & Medicaid Services CMS-ESRD Network Annual Conference February 28, 2007

4. Table 3.6 Number of Medicare Beneficiaries, 1970-2030 The number of people Medicare serves will nearly double by 2030. 76.8 61.0* 45.9 Medicare Enrollment (millions) 39.6* 34.3 28.4* 20.4 * Numbers may not sum due to rounding. Source: CMS, Office of the Actuary.

7. A Variation Problem Dartmouth Atlas of Healthcare

9. The Healthcare Value Imperative • We spend more per capita on healthcare than any other country in the world • In spite of those expenditures, US Healthcare quality is often inferior to other nations and often doesn’t meet expected evidence-based guidelines • There are significant variations in quality and costs across the nation and there appears to often be an inverse relationship between quality and expenditures (cost) • CMS is responsible for the healthcare of a growing number of persons • CMS, in partnership and collaboration with other healthcare leaders, must demonstrate leadership in addressing these issues

10. Patient Counts & Counts of New & Returning Dialysis Patients

11. Prevalent patient counts, by modality

12. Medicare vs. non-Medicare ESRD spending

13. Incident & prevalent rates of ESRD, by modality

14. Geographic variations in incident rates by modality: hemodialysis, 2004

15. Geographic variations in incident rates by modality: peritoneal dialysis, 2004

16. Geographic variations in incident rates by modality: transplant, 2004

17. Geographic variations in prevalent rates by modality: hemodialysis, 2004

18. Geographic variations in prevalent rates by modality: PD, 2004

19. Geographic variations in prevalent rates by modality: transplant, 2004

20. Transplant wait list & wait times, by race

21. Geographic variations in median transplant wait time (in years), 2004

22. Vascular access use in dialysis patients

23. Dialysis adequacy: Mean URR (%)

24. Dialysis adequacy : Mean weekly Kt/V

25. Patient distribution, by mean monthly hemoglobin (g/dl)

26. Mean monthly hemoglobin & mean EPO dose per week

27. Diabetic preventive care

28. Overall compliance with prescription drug therapy

29. Change in all-cause & cause-specific hospitalization rates since 1993

30. Adjusted five-year survival, by first modality

31. Costs of the ESRD, Medicare,& EGHP programs

32. Per person per year total Medicare ESRD expenditures

33. Per person per year Medicare ESRD expenditures, by modality

34. Total healthcare patient costs for compliance vs. non-compliance with drug therapy

35. Healthy People 2010 targets & levels achieved

36. ESRD Value Imperative • Growing number of patients needing renal replacement therapy • Epidemic of CKD: 20 Million Americans • Increasing shortfall of donor kidneys • Unless we can mitigate progression of CKD, increasing need for dialytic services • Quality of care has improved for a number of clinical performance measures in ESRD • Many of these have started to level off or reach a peak

37. ESRD Value Imperative • Many other metrics of quality have not improved in ESRD and there are many “opportunities for improvement” we’re not addressing • Particularly true for compliance with medications, infections, etc. • We will not meet Health People 2010 Goals globally • There are wide variations in treatment modality usage, outcomes, costs of ESRD care • Regional, facility variations • Health disparities • CMS, in collaboration with the renal community, needs to address these imperatives

38. Congressional & Employer Interests • Many opportunities for improving the quality of healthcare services, outcomes and efficiency • Increasing reimbursement for healthcare services leads to: • No uniform or widespread improvement in quality • Increased utilization of some services • Net increase in overall healthcare expenditures • Congress & employers looking to CMS and healthcare providers to demonstrate ability to improve quality, avoid unnecessary complications and costs • Overall Medicare payment reform linked

39. Healthcare Transparency Initiative • Administration’s Transparency Initiative • Making available quality and price/cost information • Allowing consumers, employers, payers to choose & effect higher value healthcare • Presidential Executive Order & Secretary’s Value-Driven Health Care Initiative • Providing quality information • Providing price/cost information • Promote interoperable HIT systems • Implement incentives to promote higher quality & greater efficiency in healthcare

40. Value-Driven Healthcare Initiative • Community Leaders (Tier 1) • Early-stage community collaboration efforts in healthcare quality • Recognized by the Secretary of HHS • Value Exchanges (Tier 2) • Local collaboratives focused on transparency, quality improvement and use of aggregated quality, efficiency & cost/price data • Designated by the Secretary HHS • Learning Networks run by AHRQ • Chartered for Medicare data access by CMS

41. Value-Driven Healthcare Initiative • Better Quality Information for Medicare Beneficiaries: BQI Pilots via AQA (Tier 3) • WI, MN, IN, MA, AZ, CA • Testing of data aggregation & public reporting of commercial, Medicare, & other data • Pilot site use of quality data for benefit of Medicare beneficiaries: • Quality improvement • Consumer & employer choice of providers • Pay-for-Performance and other incentives for higher quality and efficiency

42. CMS as a Public Health Agency • Using CMS influence and financial leverage, in partnership with other healthcare stakeholders, to transform American healthcare system • Focusing on not just Medicare & Medicaid, but also Commercial, uninsured, etc. • Quality, Value, Efficiency, Cost-effectiveness • Person-centeredness • Assisting patients and providers in receiving evidence-based, technologically-advanced care while reducing avoidable complications & unnecessary costs

43. CMS Quality Roadmap • VISION: The right care for every person every time • Make care: • Safe • Effective • Efficient • Patient-centered • Timely • Equitable

44. CMS Quality Roadmap: Strategies • Work through partnerships to achieve specific quality goals • Publish quality measurements and information as a basis for supporting more effective quality improvement efforts • Pay in a way that expresses our commitment to quality, efficiency & value • Promote health information technology adoption • Promote evidence development for coverage and clinical purposes

45. CMS P4P Initiatives • Hospitals • Nursing Homes • Home Health Agencies • Dialysis Facilities • Physician Offices • More to come……. • Cross-setting quality & efficiency focus (care across the continuum) increasingly important

46. CMS P4P Initiatives (MMA & Before) • Hospital Quality Initiative (MMA section 501b) • Premier Hospital Quality Incentive Demo • Physician Group Practice Demo (BIPA 2000) • Medicare Care Management Performance Demo (MMA section 649) • Medicare Health Care Quality Demo (MMA section 646) • Chronic Care Improvement Program (MMA section 721)

47. CMS P4P Initiatives (MMA & Before) • ESRD Disease Management Demo (MMA section 623) • Disease Management Demo for Severely Chronically Ill Medicare Benficiaries (BIPA 2000) • Disease Management Demo for Chronically Ill Dual-Eligible Beneficiaries • Care Management for High-Cost Beneficiaries

48. Deficit Reduction Act of 2005 • Medicare Part A • Hospital Value-based purchasing plan • Demonstration projects in gainsharing • Post-acute care payment reform demonstration project • Hospital quality reporting: measure set expanded • Hospital-acquired infections: Non-payment for 2 conditions • Medicare Part A and Part B • Home Health Agency quality reporting • Prelude to wider P4P in Federal programs ?

49. Tax Relief & Healthcare Act of 2006 • Establishes a 1.5% bonus payment for physician office submission of quality measures between July 1, 2007 and December 31, 2007 (PQRI) • Will use PVRP measures initially, but CMS must develop an expanded group of consensus-based measures via NQF or AQA or similar groups • By August 15, 2007: Publish proposed measures in FR • By November 15, 2007: Publish final list of measures • Allows for measures reported in registries • Sets stage for further Congressional action in 2008 re: physician payment structure and P4P

50. Hospital Quality Initiative • National Voluntary Hospital Reporting Initiative (NVHRI) public-private initiative • Federation of American Hospitals • AHA • AAMC • CMS , JCAHO, others • Hospital Quality Alliance • Medicare Modernization Act of 2003: Section 501b – Financial incentive of 0.4%