Quality and Pricing Transparency from a Payor

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Quality and Pricing Transparency from a Payors
Perspective
Bill Fried, M.D.Medical DirectorMidAtlantic
RegionAetna
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• The Changing Health Care Environment
• Consumerism
• Price Transparency
• Quality Transparency
• Consumer Decision-Support Tools

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The Financial Projections
The Changing Health Care Environment
4.6 Annual Growth Rate inHousehold Income
12 Annual Growth Rate in Health Insurance
Premiums
68,277
48,769
34,836
24,882
17,773
12,695
9,068(1)
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23
28
34
42
51
63
Health Benefits as a of Total Compensation
(1) Projected 2003 Average Health Insurance
Premium for Family Coverage Source Kaiser/HRET
Survey of Employer-Sponsored Health Plans, Bureau
of Labor Statistics 2003 National Compensation
Survey
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Percentage of U.S. Firms Offering Health Coverage
Source Kaiser/HRET Survey of Employer-Sponsored
Health Benefits 2000-2005
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Executive Order on Transparency

• August 2006 President Bush signed Executive
  Order on Transparency
• Requires federal health programs to make health
  care quality and cost transparency information
  available to consumers
• The Four Cornerstones
• Support Health Information Technology
• Provide Quality Information
• Provide Pricing Information
• Promote Quality and Efficiency of Care
• More information available at
  www.hhs.gov/transparency

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American Medical Association statement on
Executive Order

• "Today's Executive Order is a step toward
  increased price transparency in the health care
  system. However, gone are the days when a doctor
  posts fees and patients pay the doctor directly.
  Now, it's third-party payers insurers and the
  government who set prices. If we want patients
  to become more prudent purchasers of health care,
  they need to be in greater control of their own
  health insurance choices and decisions, and need
  price transparency from all insurers not just
  the federal government.

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Four Cornerstones of Value-Driven Health Care
Health Plans Responses

• Support Health Information Technology
• Personal Health Records
• Physician incentives to increase use of
  electronic services
• Provide Quality Information
• High Performance Networks
• Hospital Comparison Tools
• Leapfrog Group Hospital Quality and Safety Survey
  
• NCQA accreditation
• NCQA Physician Recognition Programs

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Four Cornerstones of Value-Driven Health Care
Health Plans Responses

• Provide Pricing Information
• Physician-specific pricing
• Average cost information for a variety of
  office-based, ambulatory, and inpatient services
  and procedures, drug costs, and episodes of care
• CMS posting of rates for elective inpatient
  procedures and common hospital admissions
• Promote Quality and Efficiency of Care
• Support of Leapfrog Groups Never Events policy
• Care Focused Purchasing initiative, which focuses
  on the quality and efficiency of health care
  providers
• Pay for Performance programs
• Bridges to Excellence program

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Consumerism
Consumerism

• Individuals will have more responsibility for
  health decisions will pay more of costs
• Content, tools, programs and services to
  encourage smarter, informed decisions
• Requires individuals to acknowledge that they
  each have a personal responsibility in achieving
  optimal health care outcomes

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Placing the Patient at the Center

• HDHP, HRA, HSA plans
• Decision tools for value-based purchasing
• Performance networks
• Personal Health Record
• Health incentives
• Health care transparency
• Integrated medical management
• Wellness programs
• Effective communications and education

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Do Consumers Really Understand the Cost of Health
Care?
Consumer Perceptions vs. Reality of Medical Costs
Source Lehman Brothers, Health Insurance
Consumerism, May 2006
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Price Transparency

• Actual negotiated rate available to consumers
  before they receive care
• Via secure website, members can access doctors
  rates for up to 30 different services most
  commonly delivered by that physicians specialty
• Rates appear in 5 categories office visits,
  diagnostic services, minor procedures, major
  procedures and other services

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Price Transparency Rates Available to Members
View Rates for the Selected Doctor
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Price Transparency Rates Available to Members
(contd)
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Consumer Research How Do People Select
Facilities?
How do you decide which hospital or facility to go to? 1st Choice ( of respondents)
Covered by my health insurance plan 40
Doctor recommends 26
Best reputation for quality in the area 16
Highly recommended specialists admit there 9
Most conveniently located 5
Other 4
Recommended by family or friend -
Least cost 0
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Do Consumers Really Understand the Site of
Service Cost Differences of Health Care?

• Radiology and Diagnostic Imaging Average Cost per
  Unit

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Consumer Research What We Have Found

• Consumers like the idea of site of service
  transparency
• Information in one online location, ability to
  match right facility to medical condition,
  convenience, and peace of mind
• Searching by site location or by name of health
  care professional depends on the procedure type
• Relatively high risk (e.g., cataract eye surgery,
  cardiac catheterization), consumers prefer
  searching by physician
• Relatively low risk diagnostic procedures (e.g.,
  CT scans, sleep study), site location is
  preferred method for searching

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Procedure-Based Site of ServiceTool

• Facility-specific information not regional
  averages
• Includes ambulatory and inpatient facility types
• Reasonable bundle of services for the procedure
• All costs included
• Range of costs based on payer claims experience
• Costs are broken down into two categories
• Managing physician charges
• Facility Ancillary charges combined (medical
  supplies, laboratory, etc.)

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Procedure-Based Site of ServiceProcedures

• Elective services where people are more likely to
  consider their out-of-pocket costs
• Common and familiar to consumers
• Planned for by a consumer
• High volume
• Multiple options for locations to seek care
• MRI, CT scan, colonoscopy, common maternity and
  cardiac procedures are a few examples of
  procedures that are available

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Medical Procedure by Facility Cost - Search on
Procedure
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The Current System Needs Improving
Quality Transparency

• Quality reliability
• Average patient has 50 chance of getting the
  right care at the first physicians visit
• Health care inefficiencies
• The right treatment
• The right delivery
• 40 opportunity to improve costs
• Public perceptions about health care
• 42 say they, or a family member, experienced a
  preventable medical error
• Consumers not using quality data
• Shuster (Rand)
• Wennberg
• Kaiser Family Foundation

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Consumers Want Information on Physicians/Hospitals
Types of Information Health Plans (Provide)
Doing Now
Not Doing/Want
Not Doing/Don't Want
58
36
6
Info. to choose best plan
55
34
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1-800 RN/med. prof. hotline
35
52
12
Providing Info. on best MDs/hospitals
Working hard to keep me
34
48
18
well
29
46
25
Making sure I get tests I need
Ensuring all my MDs have
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47
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current Rx info
23
44
23
Full info. on meds/alt. meds
Helping with Q's to ask/tests
20
45
35
to be done
Source Consumer Habits and Practices Study, 2005
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New Health Care System
Health Care Professionals
Information Accountability
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An Approach Whose Time Has Come?

• Mitigate increases in medical trends
• through consumerism
• by identifying and selecting physicians
• responsible for significant portions
• of health care spending who have met
• certain thresholds for clinical performance
• and effective use of health care resources

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High Performance Networks

• Subset of broad network
• High numbers of physicians within each specialty
• Responsible for high dollars
• Measures available to allow for differentiation
• Significant variability in efficiency and quality
• Sufficient claims experience for credible
  analysis
• Viability of new network

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High Performance Networks Caveats

• Significant employer commitment
• Collaboration with physicians
• Clinical and efficiency measures externally
  validated using established national standards
• Rankings not based solely on cost
• Disclosure to physicians and consumers
• Measures understandable and meaningful to
  consumers
• Independent oversight

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Designation Evaluation Process
High Performance Networks Designation Process
Criteria Type Measure
Volume Symmetry Episode Treatment Group (ETG) At least 20 episodes of care over 3 years
Clinical Performance All specialties measured on the following Adverse events during inpatient hospital stays 30-day unplanned hospital readmission rate Measures applicable to obstetricians/gynecologists Cervical cancer screening rate Breast cancer screening rate HIV testing in pregnancy Measures applicable to cardiologists Beta blocker use after cardiac event ACE inhibitor (or ARB) use in patients with congestive heart failure Use of cholesterol-lowering medication (statin) for members with cardiac disease
Cost-Efficiency ETG efficiency index (percentiles), relative to regional norms
Network Adequacy Verify final network satisfies established access standards
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Stakeholders inPerformance Improvement
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Quality Transparency Available to
MembersPhysician met all standards
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Quality Transparency Available to Members
Physician not meeting volume
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Driving Improvement OpportunitiesVirginia Mason
Medical Center

• Collaborative relationship with high quality,
  nationally respected health care system
• Employer support
• Collaborative experiment created
• New clinical pathway for delivery of care for
  back pain
• New reimbursement strategy required to align
  incentives
• Improved ways of working with PCPs, specialists
  and/or facilities
• Documentation and publicity of initiative
  designed to assist in repeating new approach in
  other locations, with other provider
  organizations

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Helping Plan Members Make the Change to
Consumerism
Consumer Decision- Support Tools
The right decision-support tools can help
consumers

• Cost of care
• Cost advantages of using network doctors and
  hospitals
• Quality of care
• Health information
• Health risk assessment
• Management of HRA, HSA or FSA dollars

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Resources to Help Consumers Research Cost
Quality

• Intuitive, easy navigation
• Delivers what users want
• Links to related information
• Easy on the eye
• Secure

Access to Online Tools 24/7
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Estimate the Cost of Care
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Estimate the Cost of Care Diseases and
Conditions
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Informed Care Decisions Treatment Options
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Price-A-DrugSM

• Cost of medications based on the consumers
  pharmacy benefit plan
• Retail mail-order, including mail-order
  savings
• Generic/brand alternatives consumers can discuss
  with their doctor

Available only if enrolled in this benefit with
Aetna
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Hospital Comparison Tool

• Nationwide quality outcomes information on
  hospitals for certain diagnoses and procedures
• Number of patients
• Mortality rates
• Complication rates
• Length of stay
• Links to Leapfrog Data

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Consumers Give Feedback on Their Doctors
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