Enhancing Medi-Cal Program Efficiency through Comparative Effectiveness Research

1. COMPARATIVE EFFECTIVENESS RESEARCH AND the California MEDI-CAL Program Len Finocchio, Dr.P.H Associate Director California Department of Health Care Services

2. background

3. Beneficiary Profile California HealthCare Foundation. Medi-Cal Facts & Figures. September 2009

4. Income Limits for Eligibility California HealthCare Foundation. Medi-Cal Facts & Figures. September 2009

5. Scope of Benefits California HealthCare Foundation. Medi-Cal Facts & Figures. September 2009 ± - Covered for those under 21 and in nursing homes

6. Managed Care & Fee-for-Service

7. Expenditures $45 billion Total 2010-2011 California HealthCare Foundation. Medi-Cal Facts & Figures. September 2009

8. Highest Expenditures California HealthCare Foundation. Medi-Cal Facts & Figures. September 2009

9. Managing Medi-Cal Expenditures • Better delivery of existing services • Care coordination & management, focus on prevention • Reduce the number of beneficiaries • Scale back income eligibility thresholds • Reduce scope of benefits • Curtail or eliminate optional benefits (e.g. dental, chiropractic) • Reduce provider reimbursements • Value-based purchasing • Delegate financial risk & measure performance • Non-payment for health care-acquired conditions • Evidence-based service design

10. Proposed Reductions FY2102-13 Governor’s Proposed 2012-2013 Budget. Health & Human Services. http://www.ebudget.ca.gov/pdf/BudgetSummary/HealthandHumanServices.pdf

11. Cost Saving Proposals in Budget • Improved care coordination for senior & disabled beneficiaries • Federally Qualified Health Center payment reform • Managed care expansion to rural areas • Align open enrollment with commercial plan policies • Value-based service design

12. Reasons for Better Purchasing • Buy better value with limited public resources • State budget shortfalls: $26 billion last year & $9 billion this year • “Bend the cost curve” • Improve quality of care & health of beneficiaries • Maintain income eligibility and benefit levels • Prepare for large program expansion in 2014

13. Value-based service design

14. Key Issues & Questions • Medical interventions often adopted without rigorous evidence • New interventions are more effective than the previous standard of practice • Can we perform technology assessment retrospectively? • Can we selectively purchase health services using evidence? • Can we selectively purchase health services in a systematic & transparent, not haphazard, way?

15. Value-Based Service Design • Assure beneficiary access to necessary health care services • Identify and reduce services that: • Do not improve health outcomes • May cause harm to patients • Are overused & should only be provided under limited conditions. • Not synonymous with addition or removal of benefits covered under the State Plan.

16. Systematic Evidence Review • Evidence-based treatment guidelines from organizations whose primary mission is to conduct objective analyses of the effectiveness of medical interventions: • National Institute for Health and Clinical Excellence (NICE) • Agency for Healthcare Research and Quality • US Preventive Services Task Force • Patient-Centered Outcomes Research Institute • Individual studies in peer reviewed literature • Clinical practice guidelines published by medical and scientific societies.

17. Ranking Interventions DESIRABLE UNDESIRABLE Hazardous High-volume Expensive Questionable effectiveness Moderate-volume Moderate expense Effective High-volume Cost-saving

18. Examples of Candidates Where evidence shows little or questionable value: • Vertebroplasty • Implantable cardioverter difibrillators • Arthroscopic surgery for knee osteoarthritis • Exercise electrocardiogram for angina • Lumbar imaging for lower back pain

19. Determine Costs & Feasibility • Determine potential costs and savings from modifying, curtailing or eliminating targeted services. •  Determine feasibility of implementation: • Evaluate the cost and timeframe for computer system changes • Staffing & expertise needed to craft policies that effectively limit inappropriate use of a service without interfering with appropriate (i.e., scientifically justified) use of that same service • Ability to use utilization management staff to effectively manage the targeted services • Identify services requiring prior authorization for any particular beneficiary

20. Transparency & Stakeholder Engagement • Consult with stakeholders • Including health professionals, Medi-Cal providers, and consumer advocacy organizations prior to modifications to targeted services • Notification about proposed changes • To targeted services, rate methodologies and payment policies • Receive, review and respond to written input • Regarding changes and provide a public stakeholder meetings • Provide for an appropriate and meaningful response • Notify the legislature • Of the action taken and reasons for the action.

21. Issues with Implementation • Systematizing evidence review • Consumer preferences, fear, knowledge • Managing stakeholder engagement • Lobbying by professional and advocacy groups • Push me – Pull You of expanding coverage while contracting services/benefits

22. For Research Community • Build body of related research – comparative effectiveness of services and: • Consumer perceptions • Practitioner behaviors • Deepen working relationships with major payers • Communicate effectively and strategically about findings • Take the long view

23. thanks Len Finocchio, DrPH len.finocchio@dhcs.ca.gov 916.440.7400