Pay for Performance: Driving Improvement through Provider Recognition & Reward

1. Pay for Performance: Driving Improvement through Provider Recognition & Reward MCOL Healthcare Web Summit Participating Provider Reimbursement June 2003

2. Who Are These People? • Integrated Healthcare Association • A California leadership group of health plans, physician groups, and health care systems, plus academic, purchaser, consumer, and pharmaceutical industry representatives, committed to policy development, public dialogue, and special projects associated with the continuing evolution of managed care.

3. What Are They Doing? Pay for Performance involves: • Commonmetrics for physician group performance • A public scorecard displaying the results • Individual health plans’ “significant” $$$ to reward physician group performance

4. And Why are They Doing This? • Purchasers want value for premium $ • Need to create a business case for quality at the provider level • Create more constructive health plan – physician group relationship • Need single, respected medical group report card to promote competition on quality and help consumer choices

5. Participating Health Plans • Aetna • Blue Cross of California • Blue Shield of California • CIGNA HealthCare of California • Health Net • PacifiCare • Others in year 2……? Approx. 8 million HMO enrollees now

6. The Health Plans’ Delegated Model Dilemma • Most non-Kaiser plans contract with same physician groups • No plan > 25% of a physician group’s revenue • Quality improvement at the physician group level benefits many plans • Therefore, competition works against an individual plan’s incentive to improve the infrastructure of its physician groups

7. The P4P Fundamentals r • Commercial HMO/POS enrollees • A balanced scorecard • Audited admin data for clinical scores • Independent entity validate data • Public reporting of results • Reward improvement and performance • The Power of Multiples • Common metrics drive performance • Concentrated payments = real $$$

8. The Measures • Collaboratively designed • Balanced • Clinical – 50% • Patient satisfaction – 40% • IT investment – 10% • Evolving over time • Raise the bar, carefully add measures

9. Preventive Care Breast Cancer Screening Cervical Cancer Screening Childhood Immunizations Chronic Disease Care Appropriate Medications for People with Asthma Diabetes HbA1c Testing Cholesterol Management: LDL Screening The Clinical Measures

10. Patient Satisfaction Domains • Communication with doctor (10%) • Overall ratings of care (10%) • Specialty care(10%) • Timely Access to care(10%) • TOTAL = 40%

11. IT Measure • Group can demonstrate capabilities ineither or both of two key domains: • Clinical data set integration (group level) • any two of encounter, lab results, pharmacy, inpatient or ER, radiology • Clinical decision support (point of care)

12. Scorecard Decisions • Scorecard will be public • We will make every effort to make it consumer friendly • Will include non-English availability • Will require a separate 3d party vendor • Will partner with State OPA • Requires adequate encounter data

13. Health Plan Payments • Each plan individually decides source, amount, and payment method • 2004 payment based on 2003 results • Contract amendment process is key • Not all plans have completed their 2004 budgets and program designs • IHA urging plans to do 5-10% bonus

14. What it Means • Unprecedented cooperation by health plans • First statewide, multi-plan initiative of its kind • Changes the plan-group conversation? • Speeds up physician group consolidation? • Preserves the delegated model • Begins long term QI process • Benefits all patients, not just HMO enrollees

15. Key Implementation Issues • Group variation in encounter data submission • Plan variation in “catching” group data • Health plans want to collect and use other data • Some plans REALLY like their own scorecards • Amending group contracts is VERY tricky • “Unbundling” P4P from regular contract cycle • Will purchasers recognize/reward plan? • Possible adverse selection for best groups?

16. How to Provide Input • Consult web site for updates – www.iha.org • Sign up for e-Updates: e-mail to P4Pinfo@iha.org • Contact IHA directly: • Beau Carter, Executive Director • Integrated Healthcare Association • 49 Quail Court, Suite 205 • Walnut Creek, CA 94596 • Tel: 925/746-5100 Fax: 925/746-5103