PayforPerformance: Three Steps to Getting it Right

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Pay-for-Performance Three Steps to Getting it
Right

• Irene Fraser, Ph.D.
• Director, Center for Delivery, Org. and Markets
• Presentation to
• National Institute of Health Policy
• May 9, 2006 Seminar

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(No Transcript)
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How Hazardous Is Health Care?
Source Berwick, D.M.
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For P4P to Work, Need to Get 3 Things Right

• Measure the right
• things well
• Provide right incentives
• to right providers
• Have capacity for
• change

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Measurement Challenges (1) Align Measures

• Horizontally, within efforts for
• National tracking
• NHQR and NHDR
• Public reporting
• Hospital Quality Alliance
• Ambulatory Quality Alliance
• National Quality Forum
• Pay-for-performance
• Quality improvement
• Vertically, so these efforts are nested

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Measurement Challenges (2)Data, Data, Data

• Measures and data can improve with use good
  measures and data can get better (though not
  perfect)
• BUT Even good measures with bad data can create
  mischief
• Need local data, but national benchmarks
• There is no gold standard
• Clinical, administrative, patient experience of
  care data all have strengths, weaknesses
• EHR no data panacea

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Measurement Challenges (3) Need Usable Products
and Strategies for Use
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AHRQ Measurement Initiatives

• National tracking and benchmarks
• National Healthcare Quality/ Disparities Reports
• Measure alignment with NQF, HQA, AQA, etc.
• Measuring local experience of care
• CAHPS for plans, hospitals, nursing homes etc.
• Measuring culture of safety
• Measuring hospital quality and safety
• Inpatient Quality Indicators, Patient Safety
  Indicators, Pediatric Indicators
• Measuring potentially avoidable admissions
• Prevention Quality Indicators
• Physician Measures Ambulatory Quality Alliance

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The Healthcare Cost and Utilization Project
(HCUP)

• Federal, state, industry partnership
• Has 90 of all inpatient discharges
• Growing ED, ambulatory surgery data
• Includes charge, payer, clinical data
• Extensive use by researchers and policy-makers
• New methodology converts charges to cost
• Friedman, Journal of Health Care Finance, 2002
• Quality Indicators Usable with any discharge data

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AHRQ Quality Indicators (QIs)

• Developed through contract with UCSF-Stanford
  Evidence-based Practice Center
• Use existing hospital discharge data, based on
  readily available data elements
• Incorporate severity adjustment methods
  (APR-DRGs, comorbidity groupings) in IQIs
• Original goal Use for national tracking, quality
  improvement
• Growing use for reporting and P4P

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What are the AHRQ Quality Indicators?
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States with Inpatient Databases



WA
VT
MT
ME
ND
MN
NH
OR
ID
WI
MA
SD
NY
WY
MI
RI
IA
PA
CT
NE
NV
OH
NJ
IN
UT
IL
CO
DE
CA
VA
WV
KS
MO
DC
KY
MD
NC
TN
AR
OK
AZ
NM
SC
GA
AL
MS
Legend
TX
LA
HCUP Partner
FL
AK
Non-HCUP Partner
Does Not Collect Inpatient Data
HI
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Wide-scale, Growing Use

• National Healthcare Quality and Disparities
  Reports
• Internal quality improvement hospitals and
  hospital associations in many states
• Targeting interventions for preventable
  admissions
• Pay for Performance
• Hospital-level public reporting
• Next Submission through NQF

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Example Use Prevention Indicators to Target
CHF Interventions
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Eight States Use AHRQ QIs for Public Hospital
Reporting
Wisconsin (parts of state)
Oregon
New York
Massachusetts
Utah
Colorado
Florida
Texas
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Particular Challenges Measuring Patient
Experience and Efficiency
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Issues Not only Technical but Philosophical and
Political

• Measures are based on different conceptual
  frameworks
• Lowering overall costs
• Reducing outlay by a particular payer
• Avoiding cost of overuse and misuse
• Reducing waste in appropriate services
• The efficiency equation (quality/cost) is
  subjective
• 12/6 2/1 mathematically but not politically

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Quality and Cost

• Complex relationship between quality and cost

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Bad
?
Good

• Source Analysis of 2001 Healthcare Cost and
  Utilization Project (HCUP) Nationwide Inpatient
  Sample (NIS) data by Barry Friedman, PhD

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AHRQ To Do Evidence Review of Efficiency Measures

• Goal
• Initiative Identify, Categorize, and Evaluate
  Health Care Efficiency Measures
• Led by
• Paul Shekelle and Beth McGlynn, with Dana Goldman
• Project Officer
• Herb Wong

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Timeline onEfficiency Measures Project

• Sept. 2005 Contract awarded
• Jan. 2006 Review Literature Practice
• Identify measures in current use
• May 2006 Typology
• May 2006 Develop evaluation criteria
• Stakeholder, expert input
• May October 2006 Evaluate measures
• November 2006 Final report

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For P4P or Reporting to Work, Need to Get 3
Things Right

• Measure the right
• things well
• Provide right incentives to right
• providers
• Have capacity for
• change

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Pay for Performance Framing Observations

• Financial incentives are inherent in any and all
  payment systems.
• It is not a question of incentives vs. no
  incentives.
• Public reporting is an incentive
• Unintended incentives can be strong as intended
  ones
• Financial incentives are just one force shaping
  quality
• Hospitals and hospital associations can be
  critical to making it work right

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What Does the Evidence Show?Dudley et al.
Evidence Review

• Incentives Can Improve Quality
• Factors that seem to matter
• Revenue potential (and certainty of gain)
• Costs and difficulty of meeting gain
• Enabling factors at the patient level
• But most research omitted key variables
• Structured evaluations for the future are
  important
• Dudley et al., 2004

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Impact of P4P on Care by California Physicians

• Study tracked 200 physician groups in two
  PacifiCare networks, 2001-2004
• California network had P4P
• Northwest network did not (control)
• Pap smear quality in p4p improved 5.3, compared
  with 1.7 in control group
• Mammography and hemoglobin tests improved in both
  P4P and control sites
• ¾ of rewards went to top performers
• Most improvement came from lowest performers
• Rosenthal et al., JAMA, October 2005

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But Evidence Still Weak on Impact of Critical
Design Components

• What to reward?
• structure (e.g. HIT), process, or outcomes
• Improvement or achievement
• How to structure reward?
• Market factors affecting rewards
• How much market share do you need?

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Evidence Needed on Critical Design Components
(contd)

• How Much of What Kind of P4P to Correct Perverse
  Incentives?

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AHRQ Formulating Agenda for Building P4P Evidence
Base

• Many calls for AHRQ activity in this area
• MMA section 646 calls for learning laboratory
• Our thinking Need rigorous but expedited
  evaluations of existing or new P4P programs
• Cut across public and private payers
• Common variables, evaluation criteria where
  possible
• Quick dissemination of findings in usable form
• Practical

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AHRQ-supported MCRR Supplement Emerging Evidence
on P4P

• Goal
• Fast transfer of early P4P evidence about P4P
  from field to policymakers/managers (15 months)
• Findings
• Evidence that P4P can improve quality
• Implementation Challenges
• Medical groups may dilute power of incentive
• Active dissemination
• April briefing to 100 of CMS leadership
• Source Gary Young, 1/9/06 CMS presentation

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Various Financial Incentive Mechanisms within
Practices

• Equal distribution to all providers
• Distribution dependent on individual provider
  performance earnings for practice
• Distribution dependent on individual provider and
  practice designed incentives
• No distribution or communication to individual
  providers system changes may improve quality
• Hybrid approaches that (e.g.) retain some
  earnings and distribute others to individual
  providers
• -Source James Burgess, 3-9-06 CMS presentation.

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Research in the Works

• Rewarding Results
• Demonstration project led by RWJF
• AHRQ/RWJF Evaluation led by Gary Young
• Compendium of Aligned and Misaligned Incentives
• Harmon Jordan, Carol Simon

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Call for Future Research

• AHRQ requesting research on patient-centered care
  for patients with multiple conditions and risk
  factors
• Specifically, research on
• Consequences of P4P strategies on quality, cost,
  and access to care for patients with multiple
  co-morbidities
• Identification of P4P program characteristics
  associated with quality improvement and
  efficiency gains in this population
• See http//grants1.nih.gov/grants/guide/notice-f
  iles/NOT-HS-06-032.html

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Also Need Tools and Dissemination of Existing
Evidence

• Decision Guide for Quality-Based Purchasing
• Identifies decision sequence
• Provides experience, theory, and (limited)
  empirical findings at each stage
• (Adams Dudley and Meredith Rosenthal)
• AHRQ/Alliance Conference on Efficiency Measures
  used for P4P, reporting May 23-24 2006
• Conference of Blue Cross Blue Shield plans on P4P
• Pilot Learning Network for employer coalition
  executives and Medicaid agency leaders on P4P

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For P4P or Reporting to Work, Need to Get 3
Things Right

• Measure the right things well
• Provide right incentives to right providers
• 3. Have capacity for change

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The GoalSystem Improvement
System Design for Quality Value

• Documented Results
• Quality
• Patient Safety
• Efficiency
• Access
• ROI

Incented by payment and other incentives
(microsystems macrosystems)
Informed by evidence and models of successful
design strategies
Facilitated by improved HIT
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Need Practice-Based Research
DECISION-MAKERS
RESEARCHERS
Info Tools
Info Tools
PUBLICATIONS
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Provider-Based Networks a Mechanism for Change

• Formula
• Health plans, hospitals, doc offices, LTC
  facilities, researchers
• Strong involvement of operational leadership
• Under contract with AHRQ
• Quick, action-oriented task orders
• Evaluation of early version
• 60 of projects brought substantial operational
  changes
• Many other projects shaped national policy, data
• New ACTION contracts in 2006

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System Design Projects Using this Approach

• Getting Lean
• Denver Health System Redesign
• Measuring waste
• Intermountain Health Care and others Brent
  James
• Improving safety with and without an EHR
• Intermountain Health Care and others Brent
  James
• How do decision-makers define evidence?
• Kaiser N. California
• Your thoughts on topics, ways to work with this
  mechanism?

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Home Pagehttp//www.AHRQ.gov

• irene.fraser_at_ahrq.hhs.gov