Maryland Management Meeting Plenary December 13, 2010

1. Maryland Management Meeting PlenaryDecember 13, 2010 Jack Kemp Treatment Research Institute (TRI) jkemp@tresearch.org

2. Overview Contemporary Understanding of Addiction Good and Modern System Health Care Reform and Parity System Innovation and Improvement Health Care Payment and Financing Reform QI via Performance Management

3. I. Contemporary Understanding of Addiction

4. Core Foundation Health Care Arena – Addiction is a HEALTH problem: Part of mainstream healthcare Chronic not acute condition: Purchasers will need to change contracts, funding mechanisms and expectations Treatment programs will need to change from acute to chronic care design and service delivery (more)

5. Core Foundation Medication Assisted Treatment (MAT) New medications for addiction Psychotropic meds for co-occurring MH disorders Recovery is the goal Treatment prepares for recovery Continuing care Disease & self management Recovery Support Recovery Coaches/Linkage Coordinators Family and other “community strengths” support Return to treatment program for “tune ups”, etc.

6. The ACUTE Care Model The concept of “CURE”

7. A Nice Simple Model

8. Acute Care Assumptions Some fixed amount or duration of treatment will resolve the problem Treatment Completion is a goal and expected outcome Evaluation of effectiveness should occur following completion Poor outcome means failure

9. In Chronic Illnesses . . . The effects of treatment do not last very long after care stops Patients who are out of treatment or contact are at elevated risk for relapse

10. So, For Treatment…. One goal is to retain patients at an appropriate level of care and monitoring Another goal is to prepare patients to do well in the next level of care The effects of treatment are evaluated during treatment – not post-discharge

11. New Expectations Programs are responsible for results during treatment Treatment offers choices – adaptive care Easy transition between levels of care and treatment programs Collaboration vs. competition among programs Recovery Oriented Systems of Care: Continuing care and self-management

12. Some System and Program Changes New funding models to purchase care System integration not autonomous programs Episode-based and Bundling services Collaboration across treatment agencies Connecting payment to performance: Reward Quality not Quantity Performance based contracting Incentives for results

13. Good and Modern System (SAMHSA Draft May 28, 2010)

14. Introduction ACA recognizes that early intervention … treatment of mental health and substance use disorders are an integral part of improving and maintaining overall health. (1) Integration of primary care and behavioral health are essential. (1)

15. Overview of ACA Fundamentally will change or improve what services will be available to individuals who have mental and substance use disorders. (2) Benefit packages must include SUD Create additional incentives to coordinate primary care, mental health and addiction services. (2) Health homes for chronic health conditions Grants for co-located primary and specialty care

16. Vision Grounded in a public health model that addresses the determinants of health, system and service coordination, health promotion, prevention, screening, and early intervention, treatment, and recovery support to promote social integration and optimal health and productivity. (more)

17. Vision Mental health and addiction services need to be integrated into health centers and primary care practice settings where most individuals seek health care. (3) In addition, primary care should be available within organizations that provide mental health and addiction services. (3)

18. Principles Preventing and treating mental and substance use disorders is integral to overall health. (4) Effective care management is key to coordinating health and specialty care. (4) Technology will be an important tool in delivering services. (4) (more)

19. Principles Reimbursement strategies must be implemented to align incentives and control costs. This includes paying for outcomes rather than paying for additional quantities of services. (5) Services that are proven effective or show promise of working will be funded; ineffective services and treatments that have not shown promise will not be funded. (5)

20. Proposed Continuum of Services Health Homes Prevention and Wellness Services Engagement Services Outpatient and Medication Services Community Supports and Recovery Services Intensive Support Services Other Living Supports Out of Home Residential Services Acute Intensive Services (10)

21. Empowered Health Care Consumers Participant direction of services allows individuals … to choose, supervise and in some instances, purchase the effective supports they need rather than relying on professionals to manage these supports. (11) The concept of participant-directed services goes well beyond the intent of person-centered planning and active participation in service planning. (11)

22. Quality and Performance Management The law will also help payers to “rethink” how payment strategies link performance improvement and payment while moving away from the current incentives to provide more care without evidence of improved outcomes under fee-for-service models. (13)

23. Continued Partnerships The good and modern system focuses on the need for better integration of primary care and behavioral health. This does not supplant the continued need to work with other systems that serve individuals with mental and substance use disorders. e.g., criminal justice, child welfare, education, etc. (13)

24. III. Health Care Reform and Parity

25. New Enrollees Additional 32 million will have health care coverage 16 million new Medicaid enrollees 5 to 6 million with mental health and substance use disorders ALL will be guaranteed coverage for MH/SUD

26. Health Insurance Exchanges To be established by 2014 MH/SUD must be part of benefit package Parity will apply Requires HHS to award grants to states to prepare

27. Substance Abuse

28. Substance Use Disorders Treatment under Health Care Reform: Welcome to the Healthcare System Richard Rawson, Ph.D.* Thomas E. Freese, Ph.D.* UCLA Integrated Substance Abuse Programs Pacific Southwest Addiction Technology Transfer Center ________________________________________ *Authors of the following 8 slides.

29. How will the universe of SUD care change today through 2014?

35. Implications As long as the specialty care programs (AOD treatment programs) are the only places which address SUD: most people with severe problems will not receive treatment. virtually all with risky use will not receive professional attention.

36. “If Mohamed will not go to the mountain, the mountain must come to Mohamed”

37. Implications Very large number of people will now have health care insurance that will pay for addiction treatment. Many who never sought treatment before are expected to do so in the future. The type of care many will need is not generally offered at present – need new treatment models and services. (more)

38. Implications Health insurance will pay for clinical services – probably not recovery support services. Medicaid, Medicare and Health Plans will test new payment models that reward results, promote coordination of care and collaboration among practitioners. (more)

39. Implications For the States and SA Authorities right NOW: Build collaborative partnerships with Medicaid, Primary Care (e.g., FQHC’s), Insurance Commissioner, Health Plans Have a voice in Health Insurance Exchanges, Health Homes Watch for federal grant opportunities Keep abreast of Health Care Reform implementation (more)

40. Implications Provide leadership to treatment provider community and other stakeholders Assist treatment agencies to become Medicaid eligible providers and to join health plan provider panels Help providers learn how to bill Medicaid and other insurers

41. IV. System Innovation and Improvement

42. Commonwealth Fund Data Brief “Opinion Leaders Views on Delivery System Innovation and Improvement” ________________________________________ K. Stremkis, K. Davis, A.M. Audet; The Commonwealth Fund Data Brief, “Health Care Opinion Leaders’ Views on Delivery System Innovation & Improvement,” July 2010

43. Delivery System Innovation and Improvement 225 respondents to survey from health care delivery, academia and research, business, health insurance industries, government, labor and advocacy groups. 9 of 10 health care leaders believe current financial interests and lack of incentives for integration are significant barriers

44. Delivery System Innovation and Improvement Majority of leaders support the proliferation of integrated models of care but also support safeguards and performance measures for accountability ACA promotes delivery system innovation and improvement through more coordinated and accountable models and provides incentives for programs to organize themselves via: Accountable Care Organizations (ACO’s) Patient Centered Medical Homes Bundled and Global Payment for care.

45. Barriers Current financial interests and incentives Lack of financial incentives for integration Lack of alignment of public and private payer policies and practices Culture of physician autonomy The way in which providers are currently trained (more)

46. Barriers Lack of availability for technical assistance to undergo necessary transformation Patient preference for open access to providers and services.

47. Beliefs Integrated delivery systems will be an effective model for moving the U. S. health care system to more accountable care. Providing special payment arrangements and financial incentives to providers will be effective strategies for promoting accountability.

48. Beliefs Development of performance metrics and increases in transparency and public reporting should receive high priority. Concerned about undue market power and dominance among provider groups.

49. V. Health Care Payment & Financing Reform

50. Disruptive Innovation(NY Times 2/1/09) Concept pioneered by Clayton Christensen from Harvard Business School Old business models based on treating illness not promoting wellness Hospitals benefit from full beds and repeat visits No financial incentive to keep patients healthy Acute disease drove the costs (more)

51. Disruptive Innovation Disruptive innovation will shape healthcare systems to provide a continuum of care focused on each individual’s needs, instead of focusing on the crises. Fixed fee, integrated systems Routine cases handled through lower cost facilities Follow patients wherever they go within an integrated system Integrated systems are the disruptive innovation needed to be turned loose on healthcare

52. Commonwealth Fund Issue Brief “Developing Innovative Payment Approaches” ________________________________________ S. Guterman & H. Drake, The Commonwealth Fund Issue Brief, “Developing Innovative Payment Approaches: Finding the Path to High Performance,” June 2010

53. Overview New Center for Medicare and Medicaid Innovation has mandate to develop innovative payment models to improve health care delivery. Report recommends that Center: Try a variety of approaches that will encourage and reward more integrated care Work with public programs and private payers to provide consistent incentives for providers and patients.

54. Payment and Delivery System Reform Current system is fragmented and coordination of care is often lacking. Inadequate communication among providers. A vacuum of accountability for the total care of patients. Payment methods fuel this fragmentation and fosters the lack of accountability.

55. Payment and Delivery System Reform Fee for service emphasizes provision of services by individual providers rather than care that is coordinated across providers to address the patient’s needs: Volume rather than value is rewarded. Changing the way health care is organized and delivered requires a change in the way it is paid for.

56. Payment and Delivery System Reform Reforms must include an array of approaches that are compatible with providers’ current organizational structures. At the same time, the reforms must establish rewards and requirements that encourage high quality and value and create incentives to offer more coordinated care.

57. Payment and Delivery System Reform As payment methods and incentives change, providers will be able to innovate in response to those incentives. The right incentives can encourage providers to work together, to take broader responsibility for the patients they treat and the resources they use. They can encourage and reward ever-increasing levels of accountability.

58. Major Payment and Delivery System Initiatives Medical/Health Homes – a team of health professionals provides a comprehensive set of medical services, including care coordination. Accountable Care Organizations (ACO’s) – feature local effective management of a full continuum of services, shared savings and performance measurement.

59. Major Payment and Delivery System Initiatives Bundled Payment – providers receive a fixed amount to cover a specified set of services, usually related to a particular event, illness or individual. Strong incentive to for providers to manage the resources they use to provide that set of services.

60. Successfully Implementing Payment Innovation Payment pilots should not be limited to Medicare but should also include Medicaid and other public programs as well as the private sector. An array of payment models, gain-sharing and risk-sharing arrangements and reward systems should be included and the process should allow for flexibility in modifying those models as experience is gained.

61. Successfully Implementing Payment Innovation Shared savings might be used to provide a direct incentive for efficiency Linking the distribution to measures of quality improvement can safeguard quality and encourage efficiency. A key requirement is the establishment of an explicit set of objectives and a system for monitoring performance in relation to these objectives.

62. Evaluation These types of social experiments are not conducted in laboratories but in a world in which the policy environment is constantly changing. Hence, the ability to maintain strict controls is limited and attempts to do so can be counterproductive. Evaluations must deal with imperfect controls and incomplete data. Rather than being fixed in stone, payment models should continue to evolve as experience with them is gained.

63. Payment Reform Models Health Homes Accountable Care Organizations (ACO’s) Episode-based Payment Prometheus Payment Model Pay for Performance

64. Theory and Conceptual Foundation Economic theory holds that individual purchasers compare their implicit assessment of value against the explicit price to make optimal purchasing decisions. In health care, this relationship has been almost non-existent because buyers and payers are not typically the patients who receive the care.

65. Theory and Conceptual Foundation Insurers and payers have not made any distinctions in payments to providers who exhibit differences in quality. New models are being tested to bring this relationship between prices and value, as reflected in quality care, into a closer balance.

66. Health Homes

67. Health Home Functions and Attributes* Patient-centered: Relationship based with an orientation toward the whole person Actively supports patients to learn to manage and organize their own care at the level they choose Comprehensive Care: Accountable for the large majority of patient’s physical and mental health care needs, including chronic care and prevention/wellness Requires a team of care providers ___________________ *AHRQ, Patient Centered Medical Home, www.pcmh.ahrq.gov

68. Health Home Functions and Attributes Coordinated Care: Coordinates care across all elements of the broader health care system, including specialty care Builds clear and open communication among patients, their families, the medical home and members of the broader care team Superb Access to Care: Provides accessible services with shorter waiting times Responsive to patients’ preferences

69. Health Home Functions and Attributes A systems-based approach to quality and safety: Commitment to quality and quality improvement using: evidence based medicine and clinical support tools performance measurement and improvement sharing robust quality and safety data.

70. Accountable Care Organizations (ACO’s)

71. Accountable Care Organizations  Basic concept – holding a set of providers responsible for the health care of a population This set of providers is an Accountable Care Organization ___________________________________ MedPac Report to Congress, “Improving Incentives in the Medicare Program,” June 2009

72. ACO’s Includes at least primary care physicians, specialists and hospitals Defining characteristic – the ACO members agree to accept joint responsibility for the quality and cost of care received by their ACO patients.

73. ACO’s Goal – to create an incentive for providers to constrain growth in volume while improving quality of care ACO member providers are held jointly responsible for quality and cost metrics Expected to improve coordination of care and reduce duplication of services

74. ACO’s If the ACO meets both quality and cost targets, members receive a bonus If the ACO fails to meet both, no bonus and possible withholds

75. ACO’s Idea is to create a set of incentives strong enough to overcome the incentives in fee-for-service system for increased volume without improving quality ACO’s are being envisioned as one tool to induce change in the health care delivery system

76. What’s in the ACA re: ACO’s? Medicare: Establishes a Medicare shared savings program for ACO’s to take effect in January, 2012 Not pilots but permanent option Specifics left to Secretary of HHS: design of program will evolve over time FFS will continue but new incentive payments will be developed ___________________________________ Health Affairs, “Health Policy Brief, Accountable Care Organizations,” August 2010

77. What’s in the ACA re: ACO’s? Medicaid: Authorizes experimentation New Center for Medicare and Medicaid Innovation will test a variety of new payment and delivery models for both programs Possibilities: risk-based, comprehensive payment for groups of providers Coordinated care programs for chronic conditions

78. Episode Based Payment Prometheus Payment Model

79. Episode Based Payments Essentially bundles payment for some or all services delivered to a patient for an episode of care for a specific condition over a defined period. Episodes of care have two dimensions: Clinical – what services or clinical conditions comprise the episode Time – reflects the beginning, middle and end of an episode ______________________ *National Institute for Health Care Reform Policy Analysis, Episode-Based Payments: Charting a Course for Health Care Payment Reform, Jan, 2010

80. Episode Based Payments For chronic conditions, an episode could be defined as a period – a month or a year, for example – of management of the condition, including all the services provided during the period.

81. Prometheus Payment

82. PROMETHEUS Payment Taking up IOM’s challenge, a group of experts from healthcare financing, law, medicine, quality improvement, research and economics, convened in 2004 to develop a new provider payment model. Seeks to transform health care payment by moving away from unit of service payment to episode of care payment.

83. PROMETHEUS Payment Tests paying for individual, patient centered treatment that fairly rewards providers for coordinating and providing high quality care. Centers on packaging payment around a comprehensive episode of care that covers all patient services related to a single illness.

84. PROMETHEUS Payment Covered services are determined by commonly accepted clinical guidelines or expert opinion that lay out tested, medically accepted methods for best treating the condition from beginning to end. The services are calculated into “Evidence-informed Case Rates” (ECR’s), which creates a specific budget for the entire care episode.

85. PROMETHEUS Payment ECR’s include all the covered services related to the care of a single condition, bundled across all the providers who would treat a given patient for a given condition. What makes PROMETHEUS different is its strong incentive for clinical collaboration to ensure positive patient outcomes.

86. PROMETHEUS Payment Provider is paid monthly for the duration of the ECR an amount which reflects 90% of the agreed upon rate. 10% holdback is paid based on the results of the Scorecard: Quantifies whether the salient elements of the Clinical Practice Guideline (CPG) were provided, the patient’s experience of the care, and the patient’s outcomes. 70% of the score based on what the provider himself does; 30% reflects what other providers treating the patient does.

87. PROMETHEUS Practice Nexus Intended to foster clinical collaboration and flexibility in how care is provided, so long as the salient elements of the CPG are present. Because all providers in the ECR do better financially when they improve quality, PROMETHEUS encourages collaboration among providers, especially those who score highly on the scorecards.

88. Pay For Performance

89. Rationale Fee for service payments encourage overuse, while capitated payments encourage under-use. Neither systematically rewards excellence in quality. P4P incentive programs are designed to overcome these limitations by aligning financial reward with improved outcomes. ______________________________________ MedVantage & ViPS, “Pay For Performance Incentive Programs in Healthcare,” 2003.

90. Definition A pay for performance system is a remuneration arrangement in which a portion of the payments is based on performance assessed against a defined measure. Typically, there is another component of the remuneration that is independent of the amount at risk. The terms merit and bonus pay are also used to describe similar systems. _____________________________________ Congressional Research Service Report for Congress, “Pay-for-Performance in Health Care,” November 2006.

91. Impact of Private Sector P4P Programs Rewarding Results grant program funded by RWJF and California Healthcare Foundation, and administered by the Leapfrog Group

92. Impact of Private Sector P4P Programs Financial incentives motivate change – provided they are large enough to make a difference. Non-financial incentives also can make a difference. Engaging physicians is a critical activity – they must be brought in early as collaborators to ensure that the goals are clinically meaningful. There is no clear picture yet of return on investment.

93. Impact of Private Sector P4P Programs P4P is not a magic bullet – it is one of a number of activities that can work to improve healthcare quality and change the way it is delivered and financed.

94. MedVantage P4P Survey (2008)  N = 62 P4P Program Responses What Results do you attribute to P4P? 84% - Performance on clinical measures improved 66% - Improvement was statistically significant What changes do you anticipate making? 65% - Expand scope or number of measures used 53% - Change performance domains or relative weighting of measures 0% - Discontinue the program

95. P4P Goals and Strategies Incentive programs are about behavior change. They have to be focused, therefore, on the people responsible for affecting change. P4P is not a magic bullet – it is one of a number of activities that can work to improve healthcare quality and change the way it is delivered and financed.

96. Elements Common to P4P Programs A set of targets or objectives that define what will be evaluated Performance standards for establishing the target criteria Measures to determine whether the targets have been achieved Rewards – typically financial incentives – that are at risk, including the amount and the method for allocating payments among those who meet or exceed the reward threshold.

97. Purchaser Purchaser sets the expectations: Based on science/research/proven practice Defines the expectations and results Who can best provide what I want? Contracts and pays for performance and results

98. Critical Elements of Design Buy-in/Commitment Matching Goals with Mechanisms Reward Structure Continuous Evaluation with Feedback

99. P4P Design Implications for Purchaser Design P4P system to require collaboration among providers, including continuity of care i.e., movement from one level of care or one setting to another as well as continuing care Include rewards for collaboration with other providers in across treatment systems

100. Examples Pay a % of base contract for providing agreed upon/contracted services Pay remainder for achieving critical performance targets Pay incentives for meeting agreed upon performance targets

101. Contact Information Jack Kemp Treatment Research Institute jkemp@tresearch.org 215-399-0980