Improving the Quality and Value of Health Care

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Improving the Quality and Value of Health Care
Applying What Works Best A Health Plans
View Steven Halpern, MD CIGNA HealthCare
Friday, May 30, 2008 National Association of
Insurance Commissioners Summer Meeting Health
Innovations (B) Working Group San Francisco, CA
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The Problems that Health Plans are Trying to
Solve and the Solutions They Provide

• Problem Fragmentation and under-delivery of
  evidence-based care in the health care system.
• Solution
• Disease and case management programs
• Gaps in care programs
• Problem Wide variation in the performance
  (quality and total costs of care) of providers
  and the lack of competition on value (quality and
  total costs).
• Solution
• Consumer information on provider quality and
  costs
• Benefit incentives to seek high quality, low cost
  providers
• Pay for value
• Problem Lack of individual incentives for health
  and wellness.
• Solution
• Health risk appraisals and health coaching
  programs
• Benefit designs that provide incentives for
  health lifestyles e.g. Health risk appraisal
  participation, disease management participation,
  smoking cessation.

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Proactive vs. Reactive Approach Can Change
Medical Cost Trend
A system that waits for disease and illness to
occur can never be optimally effective. The
logical strategy is to maintain people at the
lowest or most appropriate level of health care
use possible. Dee Edington,Ph.D., Director,
Health Management Resource Center, University of
Michigan, as quoted in the Detroit News, April
2004.
Case Management

15-20 of employees drive 65-70 of costs, but
that segment of employees is different every year
Centers of Excellence and High Performing
Specialists
Opportunity to mitigate cost exists through
earlier intervention
Lifestyle Modification Health Risk
Assessments Biometric Screenings Wellness
Disease mgmt
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Disease Management Improving Outcomes and
Driving Significant Savings

• 7 12 improvement in clinical measures
• Behavioral screening identifies risk of
  depression in 37 of low back patients and 5-6
  of diabetics and cardiac patients.
• 90 patient satisfaction across all plans
• 11 of medical cost savings for disease managed
  conditions.

Condition
Admission Rate Reduction
Medical Cost Savings
A 2004 study published in Health Affairs
validates Well Aware diabetes program quality
improvements and cost savings.
9.0 8.0 15.9 20.3 5.0 12.6
5.7 8.7 16.5 17.3 10.0 11.0
Asthma Diabetes Cardiac Low Back Pulmonary
(COPD) Total
CIGNA BoB averages actual customer experience
will vary based on number of members with
conditions and number of cases.
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What Provider Information is Available to CIGNA
Members Nationwide

• Hospitals - nationwide, for 29 most common
  admissions
• quality based on JCAHO, Leapfrog, CMS measures
  and risk-adjusted, all-payor, mortality and
  complication rates
• Risk-adjusted total hospital costs per admission
• Physicians - nationwide, for 21 most common
  specialists
• Quality based on NQF and/or AQA measures. Board
  certification and NCQA physician recognition
• Total episode cost ETG groupers
• High tech radiology nationwide, price
  transparency for CT, MRI and PET scans
• Ambulatory procedures nationwide, price
  transparency for 16 most common ambulatory care
  procedures
• Pharmacy nationwide, price transparency for all
  CIGNA pharmacy drugs both employers cost and
  members cost

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What is Provider Competition on Value (Quality
and Total Cost of Care) Worth?

• Specialist physicians who are designated high
  value (approximately top one-third) consistently
  outperform average specialists
• 4-5 improvement in clinical quality indicators
• 29 reduction in re-admission rates
• 8-12 lower total medical costs
• Hospitals designated as high value (Centers of
  Excellence), approximately top one third,
  consistently outperform average hospitals.
• 30 fewer deaths
• 28 fewer complications
• 39 lower costs per admission

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Total Hip Replacement, 25 mile radius from zip
code 20005
Hospital EstimatedAverage Facility Cost Range EstimatedAverage Out Of Pocket Cost Range
Virginia Hospital Center ArlingtonPatient outcomes             Cost efficiency             5,994 - 10,995 4,199 - 4,700
Washington Adventist HospitalPatient outcomes             Cost efficiency             10,995 - 15,997 4,700 - 5,200
George Washington University HospitalPatient outcomes         Cost efficiency         17,199 - 23,269 5,320 - 5,927
Washington Hospital CenterPatient outcomes         Cost efficiency             5,994 - 10,995 4,199 - 4,700
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Use of Health Risk Appraisals to Identify Early
Risk Before Medical Claims and Health Coaching
Risk Reduction Improved Health, Improved
Productivity, Lower Cost
Productivity Impact 3.1 Absence Impact -2.2
days per employee year Projected Medical Cost
Savings 229 per employee per year
Mills et al, American Journal of Health
Promotion, September 2007 22 45-53
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Results from Health Savings and Reimbursement
Plans, Plus Disease Management, Provider
Transparency, and Health Coaching

• Use of preventive care increased
• First year visits increased
• Second year visits remained higher than
  traditional
• Use of Evidence Based Medicine was similar to
  traditional plans
• Increase in use of maintenance medications that
  support chronic conditions
• Total medical cost trends were lower for both
  first year and second year CDHP members
• Member out-of-pocket costs were similar
• First year members similar out-of-pocket costs
• Second year CDHP out-of-pocket costs reduced for
  both HRA and HSA members

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Highlights 2005 vs. 2006 Findings Health
Reimbursement Accounts and Health Savings Accounts

• 2005 2006
• Preventive Care Visits 12 higher 12 higher
• Evidence based medicine 96 97
• ( Same or better)
• First year medical savings 16 12
• Member cost share 19/16 13/13
• (Traditional vs. HRA/HSA)

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Barriers or Accelerators

• Barriers
• Legislation or regulation that stifle
  transparency and disclosure of consumer health
  information
• Legislation or regulation that caps MLR (medical
  loss ratio) that prevents health plans from
  performing added value services
• Limitations to the ability to offer wellness
  incentives
• Accelerants
• Comparative effectiveness legislations
• Multi-stakeholder data aggregation and profiling
  efforts
• Health information exchange within HIPAAs
  privacy and security protections
• A pathway for generic biologics and specialty
  drugs
• Initiatives to encourage value-based purchasing
  within public payors

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• Discussion