CIGNA LIFESOURCE Transplant Network MS The nation's leading transplant program

1. Patient Welfare and Selective Contracting in Kidney TransplantationDavid H. HowardDepartment of Health Policy and ManagementEmory UniversityFunding by NIDDK/NIH

2. …patients should be free to seek out the providers with the best track records given their unique circumstances. In the current environment, where patients' treatments are determined by the networks they are in, network providers are all but guaranteed. Michael E. Porter and Elizabeth Olmsted Teisberg Harvard Business Review

3. Why lies at the core of consumers’ complaints about managed care? To my mind, the answer is clear. Today’s well-educated, assertive consumers want choice and control. Regina Herzlinger, J Health Politics Policy and Law 1999 In health care there is increasing control over access to medical services. Insurance companies disallow patient free choice of physicians, clinics and hospitals outside their approved network. If there is a solution to this problem, it will take the form of changing the incentive structure: empowering the consumer by channeling third-party payment allowances through the patients or students who are choosing and consuming the service. Vernon Smith, Wall St. Journal 2006

4. CIGNA LIFESOURCE Transplant NetworkMS • The nation's leading transplant program • Each facility in our network is carefully chosen and must continue to meet our stringent quality standards. We assess several factors, including: • patient outcomes; • staff training and experience; • number of transplants performed; • waiting periods; • availability of housing arrangements and transportation for patients' families; • geographic location and accessibility; and • availability of transplant organs in the geographic area of the facility.

5. What is the Blue Quality Centers for Transplant (BQCT) Program? The Blue Quality Centers for Transplant (BQCT) is a centers of excellence bone marrow and organ transplant program offered through participating Blue Cross Blue Shield Plans. All institutions selected as BQCT centers of excellence must meet stringent Program criteria. BQCT includes for covered transplants seven individual networks: heart; lung; heart/lung; liver, lung, simultaneous kidney-pancreas; pancreas and bone marrow (autologous and allogeneic). How do you select and credential facilities? Institutions are selected for the Blue Quality Centers for Transplant (BQCT) Program based on their ability to meet defined clinical criteria that are unique for each type of transplant. Panels of transplant surgeons and physicians advise the Blue Cross and Blue Shield Association on selection criteria, which are updated in response to medical advances.

6. Humana has authorized the National Transplant Network (NTN) Site Selection Committee to establish guidelines by which the NTN is to be developed and maintained. • Transplant programs must be in continuous operation for a minimum of one year, and ideally, for four years from the date of the first transplant. • Transplant team members should be in place and working together for a minimum of one year. • Transplant programs must meet volume guidelines for the previous year or average of previous two years. (see below) • Outcomes for a solid organ transplant program will be compared to United Network for Organ Sharing (UNOS) or US Transplant, whichever is most current, and must not be significantly below the expected patient and graft survival at one year or three years. Transplant programs must meet Medicare minimum patient survival outcomes, as defined in the Federal Register for a specific solid organ transplant. 

7. Three approaches to studying the role of quality in selective contracting: • Direct method: Compare quality between in- and out-of-network providers (Gaskin et al. 2002; Mukamel et al. 2002, Lindrooth et al. 2002). • Indirect method: Infer the role of quality in contracting decisions from patient flows. (Escarce et al. 1999; Chernew et al. 1998; Feldman and Sharfstein 2000). • Very indirect method: Examine how the impact of hospital competition on quality varies by payer type. (Kessler and McClellan 2000; Gowrisankaran and Town 2003).

8. Direct method - Overview • Obtain network lists from for Beechstreet, Aetna, Humana, United Health, Cigna • Merge with a list of all hospitals offering kidney transplant services w/ outcome data for each center • Compare outcomes between in-network and out-of-network facilities

14. Quality at in-network and out-of-network transplant centers for five health plans

15. Indirect method - Overview • Use data on registrations for patients added to the kidney transplant waiting list • Create patient-level choice sets • Merge with data on transplant center location and outcomes • Compare impact of outcomes on choice between patients with private insurance and Medicare

16. Sample construction • 28,364 non-elderly adult (age 18-64) kidney transplant registrants. • Registered on the wait list between January 1, 2000 and October 31, 2002. • With private insurance or Medicare (no Medicaid). • Note that the choice of transplant center is made at the time of registration, not the time of transplant. • The database includes the universe of candidates for deceased donor transplants in the United States and 30 percent of living-donor transplant recipients. • Choice sets were constructed using distance and historical registration patterns.

17. Statistical analysis Conditional logit model: fully interact transplant center attributes patient characteristics -quality -age -distance -sex -race -health status -education -insurance

18. Statistical analysis Conditional logit model: fully interact transplant center attributes patient characteristics -quality -age -distance -sex -race -health status -education -insurance

19. Statistical analysis Conditional logit model: fully interact transplant center attributes patient characteristics -quality -age -distance -sex -race -health status -education -insurance

20. Differences between privately-insured registrants and Medicare beneficiaries

21. Estimates from the conditional logit model

22. Estimates from the conditional logit model

23. Estimates from the conditional logit model

24. Quality-choice elasticity estimates Actual: 0.14 [95% CI: -0.21,- 0.07]. One-standard deviation increase in graft failure rate for a hospital  7% decline in registrations If all registrants were privately insured: -0.22 [95% CI: -0.29, -0.15]. One-standard deviation increase in graft failure rate  11% decline in registrations If all registrants were in Medicare: -0.03 [95% CI: -0.10, 0.04]. One-standard deviation increase in graft failure rate  2% decline in registrations

25. To sum up: evidence is consistent with plans’ claims. Caveats No data on prices Endogeneity? Only observe static effects-dynamic effects may be more important

26. Porter & Teisberg’s Ingredients for Change No Restrictions to Competition and Choice • No preapprovals for referrals or treatments • No network restrictions • Strict antitrust enforcement against collusion, excessive concentration, and unfair practices • Meaningful co-payments and medical savings accounts with high deductibles, all of which will give consumers incentives to seek good value Accessible Information • Appropriate information on treatments and alternatives is formally collected and widely disseminated. • Information about providers‘ experience in treating particular diseases and conditions is made available immediately. • Risk-adjusted outcome data are developed and continually enhanced. • Some information is standardized nationally to enable comparisons.

27. Porter & Teisberg’s Ingredients for Change No Restrictions to Competition and Choice • No preapprovals for referrals or treatments • No network restrictions • Strict antitrust enforcement against collusion, excessive concentration, and unfair practices • Meaningful co-payments and medical savings accounts with high deductibles, all of which will give consumers incentives to seek good value Accessible Information • Appropriate information on treatments and alternatives is formally collected and widely disseminated. • Information about providers‘ experience in treating particular diseases and conditions is made available immediately. • Risk-adjusted outcome data are developed and continually enhanced. • Some information is standardized nationally to enable comparisons.

28. Porter & Teisberg’s Ingredients for Change No Restrictions to Competition and Choice • No preapprovals for referrals or treatments • No network restrictions • Strict antitrust enforcement against collusion, excessive concentration, and unfair practices • Meaningful co-payments and medical savings accounts with high deductibles, all of which will give consumers incentives to seek good value Accessible Information • Appropriate information on treatments and alternatives is formally collected and widely disseminated. • Information about providers‘ experience in treating particular diseases and conditions is made available immediately. • Risk-adjusted outcome data are developed and continually enhanced. • Some information is standardized nationally to enable comparisons.