Getting Beyond P4P: PROMETHEUS Payment

1. Getting Beyond P4P: PROMETHEUS Payment Alice G. Gosfield, Esq. NERVES April 13, 2007 c.2007 Alice G. Gosfield

2. Alice G. Gosfield, J.D. Alice G. Gosfield and Associates, PC 2309 Delancey Place Philadelphia, PA 19103 (215) 735-2384 Agosfield@gosfield.com www.gosfield.com www.uft-a.com

3. Overview • The contemporary quality moment • P4P • Why the physician nexus matters • Understanding the doctor-patient essentials • Five principles and a theory • Another way • Why bother?

4. Bridges to Excellence Mission Statement • “To create significant leaps in the quality of care by recognizing and rewarding health care providers who demonstrate that they have implemented comprehensive solutions in the management of patients, and deliver, safe, timely, effective, efficient, equitable and patient centered care.”

5. The Development of Quality Policy • The Woodstock Era: 80 definitions of quality by 1984 • The Rise of Toyota and Value Purchasing: selection means comparison • Order Out of Chaos: NCQA and HEDIS, unexplained variation and CPGs • Values Coalesce: managed care backlash, President’s Commission • IOM Studies – where we are now -- STEEEP

6. The Point of P4P • Propel change to more science, more safety, more patient-centeredness made known with more transparency • By paying for results, processes and systems will be compelled to change by the application of purchasing power • Faster than incremental change would produce

7. Typical Forms of P4P • Threshhold bonuses (BTE) • Tiering bonuses (IHA, CFHCC) • Cost savings against a benchmark with tiering (CMS)

8. P4P Pitfalls • You move up to the raised bar – then what? • Where is the money coming from? • There is no contractual obligation to pay • These are add-ons to contracts that are inconsistent -- what about their UM? • Margins, margins, margins • Adverse selection • Relationship to disease management? • The data is self-reported or comes from claims data: are we getting what we want?

9. Early Assessment: P4P Is Transitional at best • A good moment for quality and payment • Chronic care; low hanging fruit conceptually • Add ons to an inconsistent world which has demonstrated its inability to produce what we want • Carve out would be better • Is there a better way?

10. “Every system is perfectly designed to achieve the results it gets.” Donald Berwick, M.D.

11. “The contemporary moment in health policy is nothing short of a Dionysian rhapsody of regulation, the inhospitality tradition gone riot, the formal and final enshrinement of the doctrine that everything that is not mandatory is prohibited.” • ---James C. Robinson

12. Today’s Regulatory Quality Context: Welcome to Wonderland • Federal regulation of quality • PROs/QIOs; EMTALA; conditions of participation; Patient Safety and Quality Improvement Act, QISMC and QAPI in Medicare managed care; HCQIA • Fraud and abuse based on quality failures: • Premature discharge; false claims; services in excess of patients needs • Civil money penalties; exclusions

13. Why Is the Physician’s Business Case for Quality So Important ? • Physician Centrality • Plenary legal authority • Portal to the system • Their critical and fundamental role in the system and to their business significant others – AMA White Paper; IHI White Paper --- www.ihi.org • Expertise (Reinertsen’s Axioms) • Explain, predict and change patient futures: the healing relationship

14. Hazards to Time and Touch • Irrelevant documentation of many types: • E &M codes; false claims exposure; Medical necessity of services; Ministerial minutiae (CMNs for DME) • Health plan programs: • 1-800-nurse-from-hell; redundant safeguards (capitation and prior authorization and encounter forms and post-payment audits); inconsistent formularies • Self-induced: • Defensive medicine; inefficiencies; clinical science as individual sport

15. Time and Touch Hazards (cont’d) • Rampant consumerism • Olympic caliber Web surfing;alternative therapies; direct to consumer advertising • Administrative demands from hospital and medical staff • Messaging and work flow interruptions • Pharma reps; prescription management-- writing, renewing • Burgeoning physician report cards • Disease management approaches • Explosion of knowledge base

16. Escaping the Rabbit Hole: Five Principles • Standardize • Clinical processes, documentation, office systems, use of NPPs ‘highest and best use’ and more • Simplify: remove barriers to time and touch • Make Clinically Relevant • Budgeting, capital expenditures, payment • Engage the Patients: • For risk management and patient centeredness • Fix Accountability at the Locus of Control

17. Clinical Integration for Collective Bargaining • Held out in every network settlement with the FTC to date • Elements: (1) protocols and CPGs; (2) internal review and profiling; (3) investment in infrastructure; (4) corrective action; (5) data sharing with payors • Fee bargain must be ancillary to the real reason you are doing this

18. How to begin? • Find compatible practices and work together • Agree on documentation that will save time and facilitate your own profiling • Pick just a couple of issues: condition-specific reflecting PM initiatives or cross-cutting • Find CPGs and use them, explicitly • Begin to standardize documentation, simplify • Share with each other • Once you have saved time move on to more and then begin to price

19. Provider Payment Reform for Outcomes, Margins, Evidence, Transparency, Hassle-Reduction, Evidence, Understandability and Sustainability c.2007 Alice G. Gosfield

20. Jim Bentley, AHA Francois de Brantes, Bridges to Excellence Doug Emery, eHI Michael Pine,MD, Michael Pine & Associates Alice G. Gosfield, Alice G. Gosfield & Associates Mike Taylor, TowersPerrin Jeff Levin-Scherz, MD, HarvardVanguard/HealthOne Beth McGlynn, RAND Toni Mills, BCBS Association Meredith Rosenthal, Harvard School of Public Health Craig Schneider, MA Health Data Consortium The Design Team

21. Purposes • Get beyond P4P which is not sustainable as a payment reform model • Deal with the toxicities of FFS and capitation • Reduce administrative burden on physicians • Pay to deliver the right combination of services according to science

22. Basic Concepts • Amount of payment is derived from assessment of projected resources to deliver care in a good CPG • Negotiated base payment takes into account severity and complexity of patient’s condition • Bulk of it is paid prospectively

23. More • Evidence-informed case rate (ECR) encompasses all providers treating a patient for that condition and is allocated among them in accordance with that portion of the CPG they negotiate to deliver • Comprehensive scorecard measures process, outcomes, patient experience of care, relative efficiency – measured at the level of the contracting entity

24. Still More • Performance Contingency holdback of 10% on chronic care 20% on acute care provides basis to pay remainder of ECR in accordance with scores • – pro rata – half for quality; half for efficiency • Better performing providers get better margins and potentially additional $ • Voluntary, not total substitution, negotiated; • TRANSPARENCY OF EVERYTHING

25. Who plays? • IDS that bids for one payment for all in it • Idiosyncratic teams of providers who bid to be scored together (need not be legally an entity) • No one holds the money of someone else unless they negotiate for that • Providers can configure their groupings, if any, any way they want – 1sy 2sies can play; single hospitals can play; competitors can bid together

26. Determining Payment Amount • ECR is based initially on observed behavior with an up margin for clinical variability (eventually on actual costs) • Stratifies within the ECR for common co-morbidities (not simple addition of more CPGs) – up to a case-breaker • Triggers, conclusions and breakers are established in advance

27. Potential Benefits • Clinically relevant • Sustainable as a business model • Offers certainty in payment amount • Expects negotiation between providers and plans • Should reduce admin burden (no E & M bullets, no prior auths, no concurrent review, no postpayment claims audits, maybe no formularies) • Designed to permit ‘easy’ implementation by plans

28. More Benefits • Carved out in simple amendments from contracts that otherwise remain in place • Will improve the quality of CPGs • Lowers fraud and abuse risks • Reduces malpractice liability • Fosters clinical integration • Tracks to STEEEP values • Gives physicians more control over what they do

29. Infrastructure to be developed • ECR Translator --- to construct payment amounts from a CPG • ECR Budget Estimator – to establish the payment amount • ECR Tracker – to take data from ‘claims’ and allocate to appropriate providers the pieces of the CPG they delivered • ECR Reporter – to figure out how much is owed, if any, at the end of the CPG • Comprehensive Reportcard

30. Caveats • This will be complicated • There will be transitional costs especially given parallel systems • There are pitfalls • There is short term reality and long range potential • This will take work BUT • There will be no change without struggle

31. Next Steps -- 2007 • Model the ECRs: • (1) knee and hip replacement; (2) preventive health; (3) depression in primary care; (4) diabetes; (5) lung and colon cancer4; (5) STEMI, non-ischemic CHF, mitral valve regurgitation • Create the Engine • Identify pilot markets (Chicago, Seattle?, Winchester, MA, Philadelphia? Memphis? California? and contract for pilots • Launch pilots second half of 2007-8

32. Why bother now? • What are the other options? • Physicians are at the core of improved quality • What PROMETHEUS rewards you should be doing anyway • You can do well by doing good if you make the right thing to do the easy thing to do

33. PROMETHEUS Payment Pro·me·the·an (prə-mē'thē-ən) adj. defiantly original; so boldly creative as to have a life-giving quality “In Greek mythology Prometheus brought understanding and light to humans, thus propelling them into the age of reason. Our version of PROMETHEUS carries the hope of bringing new light and understanding to payment systems thereby propelling health care far into this new millennium.” ---The White Paper

34. Resources (Most Recent First) www.gosfield.com/publications • Gosfield, “The PROMETHEUS PaymentTM Program: A Legal Blueprint”, HEALTH LAW HANDBOOK (January, 2007) 36pp • Gosfield, “PROMETHEUS Payment: Getting Beyond P4P,”Grp Prct J (Oct. 2006) 5pp • Gosfield and Reinertsen, "In Common Cause for Quality Part 1: New Hospital-Physician Collaborations," Hospitals and Health Networks Online, October 10, 2006 Gosfield, "In Common Cause for Quality Part 2: PROMETHEUS Payment™ and Principles of Engagement", Hospitals and Health Networks Online, October 17, 2006

35. More Resources • Gosfield, “PROMETHEUS Payment™: Better for Patients, Better for Physicians.” Journal of Medical Practice Management (September/October 2006) 5pp • Gosfield, “Contracting for Provider Quality: Then, Now and P4P”, HEALTH LAW HANDBOOK, 2004 Edition, http://www.gosfield.com/PDF/ch3PDF.pdf • Leibenluft and Weir, “Clinical Integration: Assessing The Antitrust Issues,” HEALTH LAW HANDBOOK, 2004 edition, http://gosfield.com/PDF/ch1/PDF.pdf • FTC MedSouth Staff Opinion on Clinical Integration, http://www.ftc.gov/bc/adops/medsouth.htm • Reinertsen, “Zen and The Art of Physician Autonomy Maintenance”, Ann. Int. Med. 138: 992-995 (June 17, 2003)http://www.reinertsengroup.com/PDF/zen.PDF

36. More Resources Gosfield, “The Doctor-Patient Relationship as The Business Case for Quality”, J. of Health Law (2004) http://www.gosfield.com/PDF/DrPatientRelationship.pdf Gosfield and Reinertsen, “Paying Physicians for High Quality Care,” NEJM (Jan 22, 2004), www.uft-a.com/publications Gosfield and Reinertsen, “Doing Well by Doing Good: Improving the Business Case for Quality”, (March, 2003) www.uft-a.com Gosfield, “Quality and Clinical Culture: The Critical Role of Physicians in Accountable Health Care Organizations” (1998) http://www.ama-assn.org/ama1/pub/upload/mm/21/quality_culture.pdf