Improving%20the%20Quality%20of%20Care%20to%20Reduce%20Health%20Care%20Costs%20and%20Improve%20Productivity

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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_at_earthlink.net
• 773-343-8663

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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

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• Cost of Poor Quality

What is it? It is an estimate of the total costs
of ineffective and inefficient processes and
procedures. Juran Institute
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Second Printing April 2003
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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

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Health Care COPQ Categories

• Overuse
• Underuse
• Misuse
• Other
• Administrative Waste
• Delays
• Service deficiencies

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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)

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Example of UnderuseDiabetes 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

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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)

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• 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

• Intermountain Health Care/RTI AHRQ study 2007
• 122 pages with appendices
• Very technical
• Not yet published in peer reviewed journal

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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

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Better Care

• Better care costs more
• Better care costs less
• It depends

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Eliminate Underuse
B
The Goal
A
The Industry Today
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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
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• Dartmouth Atlas of Health Care2008www.dartmou
  thatlas.org

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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 resources frequency 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
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Dartmouth Atlas Websitewww.dartmouthatlas.org
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Total Medicare Reimbursements per Enrollee (Part
A and B) (2005)Midwestern Hospital Referral
Region Rates (HRRs)
City Name State Rates
Chicago IL 9262.14
Mason City IA 6902.78
Dubuque IA 6889.93
Waterloo IA 6619.47
Minneapolis MN 6442.21
Madison WI 6440.14
Sioux City IA 6379.04
Rochester MN 6375.67
Davenport IA 6258.47
Portland OR 6257.68
Salt Lake City UT 6180.15
Cedar Rapids IA 6043.52
Iowa City IA 5930.74
La Crosse WI 5581.97
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Chicago HRR Inpatient CareMedical and Surgical -
2005
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Des Moines HRR Inpatient CareMedical and
Surgical - 2005
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Des Moines and ChicagoSide by Side
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Studies comparing regional differences in
spending and the content, quality, and outcomes
of care
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Relationships between inpatient reimbursements,
volume, and price of care among chronically ill
patients during the last two years of life
(2001-05)
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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 11

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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

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Hospital Care Intensity IndexIowa 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 hospitals 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

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• Hospital Care Intensity Index
• Des Moines HRR

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Dartmouth Atlas of Health Care Iowa Area Hospital
Care Intensity Report For Iowa Health Buyers
Alliance October 15, 2008
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Iowa Area Hospital Care Intensity Report

• Performance Measure Categories
• Spending
• Intensity and Utilization
• Capacity
• Quality
• 53 hospitals measured in the report

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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

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Iowa Area Hospital Care Intensity Report

• Data in Four Sections
• State Area Rankings
• Regional Rankings
• Sample Hospital Profiles
• Consumer Reports Website Atlas information

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Section 1 State Area Ranks
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• Section 3
• Hospital Profile
• Performance compared to national percentiles of
  all hospitals

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• Section 3
• Hospital Profile
• Performance compared to national percentiles of
  all hospitals

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• Section 3
• Hospital Profile
• Performance compared to national percentiles of
  all hospitals

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• Section 3
• Hospital Profile
• Performance compared to national percentiles of
  all hospitals

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• Section 3
• Hospital Profile
• Performance compared to national percentiles of
  all hospitals

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Making Hospital Intensity Data Useful for
Patients and Consumers

• 2008 Dartmouth Atlas Chapter 4Los Angeles, CA
  case studywww.dartmouthatlas.org
• Consumer Reports July 2008Too Much
  Treatment? article and Website
  www.consumerreports.org/health/doctors-and-hospita
  ls/hospital-home.htm

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Long Beach, CA2008 Dartmouth Atlas Chapter 4
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Medicare spending, resource inputs, and care
intensity among hospitals in Long Beach, CA
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Consumer Reports Compare Hospitals for Chronic
Care page www.consumerreports.org/health/doctors-
and-hospitals/hospital-home.htm
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Consumer Reports Compare Hospitals for Chronic
Care page www.consumerreports.org/health/doctors-
and-hospitals/hospital-home.htm
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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//statesnapshot
  s.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

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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.

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The New York Times 6/14/07Reed Abelson

• In Health Care, Cost Isnt 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