Stephen M' Shortell, Ph'D'

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Organization of Care and Payment to Providers

• Stephen M. Shortell, Ph.D.
• Blue Cross of California Distinguished Professor
  of Health Policy and Management
• Dean, School of Public Health
• University of California-Berkeley

Fresh Thinking Synthesis Workshop The Center for
Advanced Study in the Behavioral
Sciences Stanford, CA May 20, 2008
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The three legged stool is on the ground

• Access
• Cost
• Quality

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• The ability to provide good medical care depends
  on context
• David Mechanic, The Truth About Healthcare, 2006,
  p. 128

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The Science of Healthcare Delivery
Performance Measurement / Transparency /
Accountability
Improved Outcomes / Improved Value
Incentives
Capabilities
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What Is Needed?

• More Integrated Care Systems that
• Can better meet the needs of chronically ill
  people
• Implement 21st century medical advances
• Provide accountability and transparency for the
  resources invested
• In short, to create greater value

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Physician Part in Dysfunctional U.S. System

• Physicians are neither leaders nor managers, but
  individual contributors who defend their
  autonomy
• Disconnected and isolated, quality improvement
  has not permeated the culture of professional
  medicine
• System is out-of-sync with the growing number of
  people with chronic illnesses

Leonard Schaeffer, Global Health Leadership
Forum, UC-Berkeley-Cambridge University, San
Francisco, January 8, 2008
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• Our findings raise disturbing questions about
  how the health system will close the quality
  chasm in medical care without transforming the
  underlying organization of physician practices.
• D. Rittenhouse, K. Grumbach, E. ONeill, et al,
  Health Affairs, 23(6), 2004

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Accountable Care System Concept

• An entity that can implement organized processes
  for improving the quality and controlling the
  costs of care and be held accountable for
  results.
• Source S.M. Shortell and L.P. Casalino,
  Healthcare Reform Requires Accountable Care
  Systems, Fresh Thinking Workshop, Center for
  Advanced Study in the Behavioral Sciences,
  Stanford University, March, 2007

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Six Models

• Multi-Specialty Group Practice (MSGP)
• Hospital Medical Staff Organization (HMSO)
• Physician-Hospital Organization (PHO)
• Interdependent Practice Organization (IPO)
• Health Plan-Provider Organization / Network (HPPO
  / HPPN)
• Independent Practice Unit (IPU)

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Key Common Features

• Teams Care Coordination
• Data Sharing Information Technology
• Ability to Improve Care
• Patient-Centered Culture
• Leadership
• Provide a foundation to be able to respond to
  payment incentives and utilize technology and
  outcomes assessments

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Literature Linking Physician Group Organizational
Attributes to Quality of Care
Laura Tollen, Organizing Medicare Linking
Physician Group Organizational Attributes to
Quality and Efficiency of Care Kaiser-Permanente
Institute for Health Policy, October, 2007
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Conclusion

• There is a small but growing evidence base that
  more organized forms of physician practice are
  associated with providing greater value (cost and
  quality performance) in the delivery of health
  care services.
• So how might more organized forms of practice be
  encouraged?

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Payment and Related Incentives

• Recommend CMS reward physician differentially
  based on results
• Also build in incentives and rewards for
  improvement
• Create non-monetary recognition awards
• Experiment with bundled payments
• Create incentives for consumers to select the
  highest performing providers
• Expand public reporting of cost and quality data
  to include physician practices
• Remove or mitigate legal barriers to ACS
  information

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Some Issues

• Who should be rewarded?
• Individual, Team, Organization
• What should be Rewarded?
• Measurement Issues
• Selection / Risk Adjustment
• Source of Payment

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• Payment reform is likely to be most effective
  when providers are organized into delivery
  systems that can accept responsibility for cost
  mitigation goals.
• J. Mongan, T.G. Ferris ad T.H. Lee, Health
  Affairs, p. 1511

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Turning the Wheel Faster
Measurement and Accountability
Incentives
Capabilities

• Accountable care systems as one part of a
  treatment plan for our chronically ill health
  system.

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Questions

• Do we agree that ACSs of some form are needed
  for comprehensive health care reform to succeed?
• If so, what are some of the policy tools
  available to promote their creation?
• What are the most significant obstacles that will
  have to be overcome?