Leapfrog Hospital Rewards Program

1
Leapfrog Hospital Rewards Program

• Suzanne Delbanco, CEO
• Catherine Eikel, Senior Program Associate
• December 9, 2004

2
Leapfrogs Mission Statement

• Trigger Giant Leaps Forward in the Safety,
  Quality
• and Affordability of Healthcare By
• Supporting Informed Health Care Decisions by
  Those Who Use and Pay for Health Care
• Promoting High-Value Health Care Through
  Incentives and Rewards

3
Populating the Pond

• Leapfrog represents..
• More than 160 large health care purchasers
• More than 36 million Americans
• More than 65 billion in health care expenditures

4
National with a Regional Approach to Change

• Regions must have
• Effective leadership
• Competitive HC market
• Concentration of Leapfrog lives
• 23 Regional Roll-Outs

5
Pillars for Improving Quality
Standard Measurements Practices
Reimbursement Incentives Rewards
Transparency
6
Standard Measurements Practices To achieve
transparency and improved quality, we must talk
the same language when asking hospitals
doctors to report
7
Initial Safety Leap Summary

• An Rx for Rx
• Computer Physician Order Entry (CPOE)
• Up to 8 in 10 serious drug errors prevented
• Sick People Need Special Care
• ICU Daytime Staffing with CCM Trained M.D. live
  or via tele-monitoring, or risk-adjusted outcomes
  comparison
• 29 mortality reduction (JAMA, 11/02)

8
Initial Safety Leap Summary

• The Best of the Best
• Evidence-based Hospital Referral (EHR) or
  risk-adjusted outcomes comparison
• gt 30 mortality reduction for 7 complex
  treatments
• Leapfrog Quality Index
• Rolled-up score of the remaining 27 of the 30
  NQF- endorsed Safe Practices

9
Transparency Make reporting results routine and
use results to make health care purchasing
decisions
10
Information for Consumers Purchasers on
Hospital Patient Safety Practices
11
Incentives RewardsEncourage better quality of
care through incentives and rewards
12
Growing Efforts to Buy Right

• Leapfrog Group Compendium of Incentive and Reward
  Programs http//www.leapfroggroup.org/ircompendi
  um.htm
• 88 programs nationwide 1 in 4 include
  Leapfrogs critieria
• 9 target consumers
• 18 target health plans
• 32 target hospitals
• 50 target physicians
• 51 are financial
• 87 are local
• Good and Bad news lots of programs but no clear
  signal for health care providers

13
Leapfrog Hospital Rewards Program A national
incentive reward initiative

• Leapfrog Hospital Rewards Program can be
  implemented by purchasers and coalitions in their
  current environments
• Adapts the CMS-Premier demonstration program for
  the commercial sector
• Provides incentives for performance improvement
  in both effectiveness (quality) and efficiency
  (cost)
• Hospitals can participate with minimal additional
  reporting
• All aspects of the program were reviewed by
  experts and vetted by stakeholders

14
Focus on five clinical areas with nationally
accepted measures
Each set of procedure-specific measures are
rolled up into an index. Each Hospital gets a
separate score for each procedure.
15
Focused clinical areas were chosen to maximize
commercial employer impact

• The 5 clinical areas represent 33 of admissions
  and 20 of a commercial payers inpatient spend,
  according to Medstats MarketScan

Potential savings from reduced complication and
re-admission rates
16
Effectiveness measures

• Hospitals can participate in from 1-5 of the
  clinical areas
• Hospitals scored separately on each clinical
  condition
• Measures for each clinical condition collected
  via Leapfrog Hospital Quality and Safety Survey
  and / or ORYX Core Measures.
• Experts weighted the individual measures within
  each clinical condition based on existing
  evidence of the potential to reduce mortality

17
Efficiency Measure

• Resource-based measure of efficiency
• Average actual LOS / case, broken down by routine
  care days and specialty care days
• Severity adjusted by data aggregator
• Re-admission rate to same hospital, by clinical
  condition, within 14 days
• Program Licensees will need to marry this
  resource-based measure of efficiency with their
  own payment-based measure of efficiency

18
Hospitals report through Leapfrog survey and core
measure vendor
Hospital Group
Hospital
ORYX Vendor
NQF/ORYX measures
Procedure-specific Effectiveness and Efficiency
Scores
Leapfrog Patient Safety Survey
Leapfrog
Leapfrog
Hospital
ORYX Vendor
ALOS re-admission
All reported data must be hospital-specific to
be reward-eligible
19
Hospitals arrayed in four groups using
expert-reviewed statistical methodology
Cardiac Bypass Surgery
1.8
Good quality, But inefficient
1.6
1.4
1.2
Top Cohort
Cohort 2
Efficiency
Efficient, But poor quality
Cohort 3
Cohort 4
1
0.8
0.6
0.4
0.8
0.85
0.9
0.95
1
1.05
1.1
Effectiveness
20
Consistent savings across conditions
CAP
AMI
CABG
of
of
of
of
of
of

Total
Avg
Grand

Total
Avg
Grand

Total
Avg
Grand
hospitals
Hospitals
Payment
Mean
hospitals
Hospitals
Payment
Mean
hospitals
Hospitals
Payment
Mean
Cohort 1
9
8.2
13,631
65
8
7.5
9
4.4
24,685
71
4,851
76
Cohort 2
56
50.9
18,699
90
55
51.9
31,626
91
115
56.1
5,809
90
Cohort 3
14
12.7
23,372
112
10
9.4
39,145
113
31
15.1
6,723
105
33
31.1
50
24.4
Cohort 4
31
28.2
25,700
123
41,025
118
7,918
123
Grand
110
100.0
20,852
100
106
100.0
34,737
100
205
100.0
6,420
100
Mean

• Based on Premier data for AMI, CABG and CAP
• 5 to 8 of hospitals fall into Top Performance
  cohort (Cohort 1)
• average payments 25 to 35 lower than average
• 25 to 30 of hospitals fall into Cohort 4
• Efficiency AND Effectiveness scores statistically
  worse than Cohort 1 bottom performer at p .05
• average payments 20 to 25 above average

21
Rewards principles
Principle 1 Rewards are a 50/50 share of
savings, by cohort, for hospital improvement.
Principle 2 All top cohort hospitals are
eligible for bonuses. Hospitals that show
sustained improvement are eligible for bonuses.
First year bonuses should be considered an
investment in the program. Principle 3 Top two
cohorts eligible for increased market share
through patient shift (co-pay or co-insurance
differential). Principle 4 Rewards are
calculated every six months based on performance
in previous six months.
22
Sample rewards structure, year 1
Hospital Incentive
Patient Incentive (Co-insurance reduction)
of
of
Contracted
Contracted
Payment
Payment

Top Performance Bonus
2.00
3.00
Improvement Bonus
Cohort 3 to Cohort 2
1.25
Cohort 4 to Cohort 3
0.50
Bonuses are paid based on plan / purchaser
average cost of top cohort hospitals
23
Purchasers and plans can execute program in one
of two ways

• License data
• Access summary data only (no detailed cost or
  quality information)
• Data sets are state-specific
• Users can incorporate into any program they
  currently have
• Users can refer to these data as Leapfrog/JCAHO
  data but cannot use the Leapfrog brand

• License program
• Abide by Leapfrog program rules for rewards
• Participate in best practice sharing with others
• Receive support from Leapfrog in implementing
• Allowed to use Leapfrog brand

24
How can Colorado benefit?

• Colorado Business Group on Health could implement
  the program
• Colorado health plans could implement the program
• Colorado hospitals can submit data to the program

25
How could CBGH implement?
If no health plan in Colorado is ready to
implement, BTE can provide assistance through its
existing infrastructure

• Hospitals submit data to Leapfrog
• Leapfrog scores data and determines
  reward-eligibility

• Medstat pulls data from plans on patient counts
  and costs by procedure in last six months
• Medstat calculates rewards and bills Participants

• BTE Participants pay rewards

• Medstat bundles Participant payments and pays
  Hospital

26
Key Implementation Dates

• December, 2004 Make final refinements to program
  infrastructure
• January 28, 2005 Ready to receive data from
  hospitals
• May 19-20, 2005 Implementation Workshop on
  Leapfrog Hospital Rewards Program and Bridges to
  Excellence in Washington, D.C.
• June, 2005 First set of national hospital
  rankings

27
The Leap over the Gridlock Has Begun

• Rapid growth in purchasers signing on to
  Leapfrogs and BTEs approach
• Rapid growth in hospitals and physicians
  disclosing status to their communities
• Active health plan support
• Massive education of consumers through purchasers
• Market reinforcement beginning through different
  channels

28
Appendix
29
Metrics -- CABG
as of 5/18/04
30
Metrics -- AMI
as of 5/18/04
31
Metrics -- PCI
as of 5/18/04
32
Metrics -- CAP
as of 5/18/04
33
Metrics Deliveries/Complicated Newborns
as of 5/18/04
34
Metrics Structural
as of 5/18/04