Innovative Strategies in Transparency November 2006

1. Innovative Strategies in TransparencyNovember 2006 Nancy Nankivil Bennett Director of Strategic Health Policy WI Department of Employee Trust Funds nancy.nankivilbennett@etf.state.wi.us

2. PresentationObjectives • To convey activities and results from the Wisconsin Transparency push • To stimulate thinking and action on Transparency Innovation • To disprove playwright, Jean Kerr’s words: “If you can keep your head about you when all about you are losing theirs, it’s possible you just haven’t grasped the situation.”

3. ETF Statistics More than 250,000 insured lives in group health program; over 526,000 members in WI Retirement System 9th largest public pension fund in United States; 23rd largest in world Total assets currently valued at $77 billion Annual health care expenditures of $800 million Secretary is non-partisan & appointed by Board ETF Mission Develop and deliver quality benefits and services to our customers while safeguarding the integrity of the Trust ETF as a Significant Healthcare Purchaser

4. ETF Value-based Purchasing Principles “Getting best healthcare for best price” • Leverage group purchasing power to implement common quality & patient safety standards • Gain transparency (disclosure) of comparative information at health plan/provider level • Reward superior value through Pay for Performance contracting with Plans/Providers • Engage consumers to make more informed decisions regarding their health care

5. What is Being Said About Transparency? • “Transparency in health care means public reporting. The most important way to improve the state of our health is in aligning our quality and cost containment agendas. We need to identify quality providers and drive market share to them.” • “Purchasers of health care need to have this kind of data so they can make apple to apple comparison on price and quality with respect to all providers in our health care marketplace. Then we will have real transparency and real competition in our health care system.” • “Informed consumers, given adequate cost, safety and quality information, and a financial stake in their purchasing decisions, will prove to be an effective driver of quality improvement and cost containment if our health care system.”

6. ETF’s Push toward Redefining Value • Began in 2002 with Group Insurance Board Charge focused on value-based purchasing tenets • In 2003 became active in National and State Initiatives like Leapfrog, WI CheckPoint, WI Collaborative, WI Healthcare Purchasers for Quality & IFEBP • 2004 Plan Year implemented Tiered Premium Contribution, Rx Partnership and Consumer Engagement Strategy • 2005 Plan Year implemented Quality Composite System • 2006 public-private collaboration passed legislation supporting WI Health Information Organization • 2007 retaining “Medical Director” role in agency

7. Health Plan Tiering Methodology • Health Plan data analyzed by utilization areas (inpatient, outpatient, Rx, etc) and based on Uniform Benefits • Data risk adjusted for age/sex differences, geographical cost variances, high-cost claims & Rx utilization • Premium contribution levels established through “Break-points” (three tiers) • Plans received premium incentive based on Quality Composite System ranking

8. Quality Composite System • Health plans compared on overall HEDIS and CAHPS (HCAHPS in future) performance • Specific weight given in 5 areas: • Disease Management (Diabetes, Asthma) • Preventive Care/Wellness (cancer screenings, tobacco cessation) • Technology/Automation (CPOE, diabetic registry, eHealth) • Patient Safety (NQF Safety Measures) • Customer Service (billing, grievances)

9. Pharmacy Carve-out Program • Centralized administration of three level co-payment benefit structure based on formulary adherence--drive market share to rebated Rx • State-wide P&T committee determines formulary through evidence-based decisions “Quality trumps Cost”--Secretary Stanchfield • All (100%) savings achieved through program passed back to purchaser • All PBM records open for purchaser audit , including retail and manufacturer contracts

10. It’s Your Choice BookletIt’s Your Benefit Newsletter • Comparative reporting on cost, quality and patient safety across plans using HEDIS & CAHPS/QCS results • Comparative reporting on specific plan features supporting improved patient care/outcomes • Use of Quality designation for plan hospitals; co-pay differential for quality-future consideration • Promotion of web-based resources for ambulatory quality and safety information at system level only

11. Transparency PushReturn on Investment • 2005 plan year premium increase at 4.9%; 2006 plan year premium increase at 9.8%; 2007 plan year premium increase at 7.4% • Medicare premiums declined in plan years 2005 & 2006 and again in 2007 • Enrollment shifts continue to occur based on cost, quality, and patient safety information • Continued legislative support in budget for value-based purchasing initiatives ($300k in 2005-07; BadgerRx Gold, addition of MD, WHIO)

12. WI Health Information OrganizationA Statewide Data Warehouse • Non-profit consortium (501C3) of health care payers, purchasers and providers formed in 2005 • State appointed to BOD in 2006 with passing of “Transparency Bill” • Finalizing Vendor Selection Process; January 2007 anticipated contract start date • Initial data-medical and pharmacy claims, physician identifiers and patient demographics; clinical quality data will be merged in 2008 • Episode of Care reportingfor Cost Efficiency reporting

13. Other Wisconsin Transparency Initiatives • WI Collaborative for Health Care Quality • WI Hospital Assoc Checkpoint/Pricepoint • both at wisconsinhealthreports.com • Governor’s eHealth Board • ehealthboard.dhfs.wisconsin.gov • Pharmacy Society of WI • new initiative to be piloted in 07 • Pharmacy-based Pay for Quality program Alignment is key issue for these initiatives

14. State Role in Health Care Transparency • Support voluntary, market-based health care solutions/initiatives vs legislated/mandated • Convene and participate in public/privateCollaboration around value-based purchasing • Push for efforts that achieve continued transparency of health care information • Lead by example with well defined, credible Benefit Plan Designs that strategically integrate Pay for Quality programs • Use “Bully Pulpit”, especially to align emerging initiatives for effective Public Policy purposes

15. Conclusion • Conveyed activities and results from the Wisconsin Transparency push • Stimulated thinking and action on Transparency Innovation • Disproved playwright, Jean Kerr’s words: “If you can keep your head about you when all about you are losing theirs, it’s possible you just Thank you for your attention and interest.