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Improving the Quality of Care to Reduce Health Care Costs and Improve Productivity. Iowa Health Buyers’ Alliance Annual Conference October 15, 2008 Jim Mortimer j.mortimer@earthlink.net 773-343-8663. Improving the Quality of Care to Reduce Health Care Costs and Improve Productivity.

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improving the quality of care to reduce health care costs and improve productivity

Improving the Quality of Care to Reduce Health Care Costs and Improve Productivity

Iowa Health Buyers’ Alliance Annual Conference

October 15, 2008

Jim Mortimer

j.mortimer@earthlink.net

773-343-8663

improving the quality of care to reduce health care costs and improve productivity2
Improving the Quality of Care to Reduce Health Care Costs and Improve Productivity
  • Estimating the Cost of Poor Quality Health Care
    • Midwest Business Group on Health 2003
    • Intermountain Health Care/RTI AHRQ study 2007
  • Better care costs less
    • Information for Iowa from the Dartmouth Atlas of Health Care
    • Actions you can take
slide3
Cost of Poor Quality

What is it?

It is an estimate of the total costs of ineffective and inefficient

processes and procedures.

Juran Institute

estimated cost of poor quality health care
Estimated Cost of Poor Quality Health Care

The Annual Cost of Poor Quality Care Per Covered Employee - 2002

$1,500 Direct Health Care Expense

400 Indirect Cost

$1,900 Total Cost of Poor Quality

MBGH/Juran Report - 2003

health care copq categories
Health Care COPQ Categories
  • Overuse
  • Underuse
  • Misuse
  • Other
    • Administrative Waste
    • Delays
    • Service deficiencies
example of overuse antibiotics
Example of Overuse: Antibiotics
  • Problem: Of 110 million prescriptions written for antibiotics, 40% are unnecessary ($17 million for common cold).
  • There is a growing number of organisms resistant to antibiotics (estimated cost is $5 billion annual national cost to treat)
example of underuse diabetes screening
Example of Underuse:Diabetes Screening

46.7% of adults age 40 and over with diabetes received all three recommended screenings* during 2004 to prevent disease complications

Rate has held constant for three years

*HbA1c test, eye exam, foot exam

AHRQ National Healthcare Quality Report 2007 page 40

http://www.ahrq.gov/qual/qrdr07.htm

example of misuse medical errors
Example of Misuse : Medical Errors
  • Problem: IOM report estimates that 44,000 to 98,000 deaths per year due to inpatient medical errors
  • In the USA
    • Half are preventable
    • Medication errors alone cause 7,000 deaths per year
    • Errors cost $17 to 29 billion per year (half for direct care costs)
slide10
Intermountain Health Care/RTI AHRQ study 2007

122 pages with appendices

Very technical

Not yet published in peer reviewed journal

Cost of Poor Quality or Waste in

Integrated Delivery System Settings

Final Report

Submitted to:

Cynthia Palmer, MSc

Agency for Healthcare Research and Quality

540 Gaither Road

Rockville, Maryland 20850

Submitted by:

RTI International

3040 Cornwallis Road

P.O. Box 12194

Research Triangle Park, North Carolina 27709

Authored by:

Brent James, MD, M.Stat.

Intermountain Health Care

36 South State Street, 21st Floor

Salt Lake City, Utah 84111-1486

K. Bruce Bayley, PhD

Providence Health System

5211 NE Glisan

Portland, Oregon 97213

Contract No. 290-00-0018

RTI Project No. 0207897.011

cost of poor quality or waste in integrated delivery system settings
Cost of Poor Quality or Waste inIntegrated Delivery System Settings
  • Overall findings:
    • 32% of care should not have been undertaken at all – Overuse
    • 35% of effort in all care undertaken is “non value-added”
    • 56% is conservative cost of poor quality care
      • 32% Overuse + 24% NVA (0.35 x 68%) = 56%
    • (Does not address misuse, errors and underuse)

Email correspondence with Dr. B. James

better care
Better Care
  • Better care costs more
  • Better care costs less
  • It depends…
slide13

Eliminate Underuse

B

The Goal

A

The Industry Today

association between medicare spending and quality ranking u s states

Minnesota

Association between Medicare spending and quality ranking -- U.S. States

Iowa

Wisconsin

Illinois

Baicker and Chandra, Health Affairs, web exclusives W4-184, 7 April, 2004

atlas categories of services
Atlas Categories of Services
  • Effective care: Evidence-based services that all patients should receive. No tradeoffs involved.Acute revascularization for AMI
  • Preference-sensitive care:Treatment choices that entail tradeoffs among risks and benefits. Patients’ values and preferences should determine treatment choice.CABG for stable angina
  • Supply-sensitive services: Services where utilization is strongly associated with local supply of health care resourcesfrequency of MD visits, specialist consultations use of hospital or ICU as a site of care

Wennberg, Skinner and Fisher, Geography and the Debate over Medicare ReformHealth Affairs, web exclusives, February13, 2002

slide18
Total Medicare Reimbursements per Enrollee (Part A and B) (2005)Midwestern Hospital Referral Region Rates (HRRs)
studies comparing regional differences in spending and the content quality and outcomes of care
Studies comparing regional differences in spending and the content, quality, and outcomes of care
slide23

35,000

35,000

30,000

30,000

25,000

25,000

Inpatient reimbursements per

decedent

Inpatient reimbursements per

decedent

20,000

20,000

15,000

15,000

R2

= 0.59

R2

= 0.07

10,000

10,000

5.0

10.0

15.0

20.0

25.0

30.0

700

900

1,100

1,300

1,500

1,700

Hospital days per decedent

Reimbursements per patient day

Relationships between inpatient reimbursements, volume, and price of care among chronically ill patients during the last two years of life (2001-05)

persistent intensity patterns
“…the amount of care given to patients early in the two-year period preceding death was highly correlated with the care intensity during the last six months of life for each individual hospital.” 2008 Atlas Executive Summary – page 11Persistent Intensity Patterns
dartmouth atlas hospital specific data
Dartmouth Atlas Hospital Specific Data
  • Medicare enrollees who died with two or more admissions to the same hospital in a two year period (2001-2005)
  • Enrollees with one or more of the following nine chronic conditions:
    • Congestive Heart Failure, Chronic Lung Disease, Cancer, Coronary Artery Disease, Renal Failure, Peripheral Vascular Disease, Diabetes, Liver Disease, Dementia
hospital care intensity index iowa hospital referral regions hrrs
Hospital Care Intensity Index

The HCI is based on two variables:

the number of days patients spent in the hospital and

the number of physician encounters (visits) they experienced as inpatients.

It is computed as the age-sex-race-illness standardized ratio

of patient days and visits. For each variable, the ratio of a

given hospital’s utilization rate to the national average was

calculated, and these two ratios were averaged to create

the index. States, regions, and hospitals with high scores

on this index used inpatient care much more than those

with low scores. The HCI for regions and hospitals was converted

into a percentile score calculated according to where

that region or hospital fell in the ranking of all regions and

hospitals for which we had an index estimate. We have calculated

the percentile ranking so that approximately 1% of

the hospitals in the database fall into each percentile.

Page 110 of 2008 Atlas Report

Hospital Care Intensity IndexIowa Hospital Referral Regions (HRRs)
slide28

Dartmouth Atlas of Health Care

Iowa Area

Hospital Care Intensity Report

For

Iowa Health Buyers Alliance

October 15, 2008

iowa area hospital care intensity report
Iowa Area Hospital Care Intensity Report

Performance Measure Categories:

  • Spending
  • Intensity and Utilization
  • Capacity
  • Quality

53 hospitals measured in the report

iowa area hospital care intensity report30
Iowa Area Hospital Care Intensity Report

Five Regions:

  • Des Moines and Central
  • Sioux City and Northwest
  • Iowa City and Northeast
  • Quad Cities and Southeast
  • Omaha/Council Bluffs and Southwest
iowa area hospital care intensity report31
Iowa Area Hospital Care Intensity Report

Data in Four Sections:

  • State Area Rankings
  • Regional Rankings
  • Sample Hospital Profiles
  • Consumer Reports Website Atlas information
slide38
Section 3

Hospital Profile

Performance compared to national percentiles of all hospitals

slide39
Section 3

Hospital Profile

Performance compared to national percentiles of all hospitals

slide40
Section 3

Hospital Profile

Performance compared to national percentiles of all hospitals

slide41
Section 3

Hospital Profile

Performance compared to national percentiles of all hospitals

slide42
Section 3

Hospital Profile

Performance compared to national percentiles of all hospitals

making hospital intensity data useful for patients and consumers
Making Hospital Intensity Data Useful for Patients and Consumers
  • 2008 Dartmouth Atlas Chapter 4:Los Angeles, CA case studywww.dartmouthatlas.org
  • Consumer Reports – July 2008“Too Much Treatment?” article and Website: www.consumerreports.org/health/doctors-and-hospitals/hospital-home.htm
slide46
Consumer ReportsCompare Hospitals for Chronic Care pagewww.consumerreports.org/health/doctors-and-hospitals/hospital-home.htm
slide47
Consumer Reports Compare Hospitals for Chronic Care pagewww.consumerreports.org/health/doctors-and-hospitals/hospital-home.htm
actions you should take
Actions you should take
  • Compile your data
    • Claims data from your carriers on cost and quality problem drivers. Estimate cost of poor quality
    • Dartmouth Atlas www.dartmouthatlas.org
    • AHRQ NHQR and State Snapshots http://statesnapshots.ahrq.gov
    • Commonwealth Fund State Scorecard data www.cmwf.org
    • Health Plans HEDIS measures
    • Local Coalition information –IHBA and HPCI
    • NBCH “eValue8” health plan performance survey www.nbch.org
actions you should take49
Actions you should take
  • Work with coalitions, carriers and consultants to identify interventions that should have positive ROI for identified problems
  • Publish data for use and education of employees and the public
  • Work with carrier/health plan to pioneer payment incentives for providers and benefit incentives for covered populations
  • Educate employees and the public to avoid errors and to self-manage chronic conditions
  • Join with other public and private employers to share problems identified in your/their data/experience and the work of implementing interventions at the community level.
the new york times 6 14 07 reed abelson
The New York Times 6/14/07Reed Abelson

“In Health Care, Cost Isn’t Proof of High Quality”

  • Pennsylvania Health Care Cost Containment Council Report: “Cardiac Surgery in Pennsylvania 2005” www.pch4.org
  • Heart bypass surgery payments to hospitals vary between $20,000 and $100,000
  • Comparable length of stay and mortality rates for high and low-paid hospitals
  • Two of highest paid hospitals had higher than expected death rates.
  • One of the best performing hospitals was paid an average of $33,549: less than half of the $80,000 average for the 60 hospitals studied
  • “Certain payers are paying an awful lot for poor quality” Marc Volavka, Executive Director, Pennsylvania Health Care Cost Containment Council