Data Sharing and Value Based Payment Strategies to Improve Health Care and Reduce Costs

Andy Vasquez

HHSC Deputy Associate Commissioner, Quality & Program Improvement,

Medicaid & CHIP Services

Senate Finance Committee

September 11, 2018 1

Senate Bill 1, 85 R, 2017, Article IX, Section 10.06

“HHSC shall coordinate with DSHS, ERS, TDCJ, and TRS to

develop recommendations and a comprehensive plan for

an integrated health care information system…to collect

and analyze data on utilization, cost, reimbursement rates,

and quality in order to identify improvements for efficiency

and quality that can be implemented within each

healthcare system.”

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Four programs serving 5.5 million Texans, at a cost of $50 billion* in Fiscal Year 2017

* $50 billion includes all sources of funding, including federal Medicaid matching funds

Program Funding:$50 billion impact

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HHSC ERS TDCJ TRS

Sources of Funding

General Revenue (GR), General Revenue-Dedicated (GR-D),and federal funds

GR, GR-D; Employer surcharge of 1% payroll;Employees and retirees pay 50% of dependent contribution

GR TRS ActiveCare: State pays $75/month; School districts pay $150/month or more; Employees pay the rest

TRSCare: State contributes 1.25%; districts contribute 0.75%; actives contribute 0.65% of payroll. Retirees contribute fixed monthly premium

FY17 Funding(in millions)

$42,612 $3,386 $601.9 $3,484

Program Demographics: 5.5 million Texans covered

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HHSC ERS TDCJ TRS

PopulationServed

Primarilywomen and children with limited income and resources

State and higher education employees, retirees, and dependents(except UT and A&M)

Incarceratedoffenders, primarily men between the ages of 20 and 64

Employees, retirees, and dependents of participating public education entities

Number of Participants

4,039,590 534,053 145,409 760,744

Average Age

21 years 44 years 39 years TRS ActiveCare: 34 yearsTRSCare: 68 years

Gender 54% female 54% female 8% female TRS ActiveCare: 63% femaleTRSCare: 66% female

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General Findings

• The agencies have similar cost drivers and cost containment strategies

• Providing quality care while controlling costs is a shared goal

• An integrated system for sharing data could be helpful when collaborating on strategies for improved quality

• The agencies analyzed three options for the report

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Option 1: Standardized reports by each health program

Pros Cons Timeframe

• A series of scheduled paper reports could be achieved within existing resources

• Agencies have different capacities for generating compatible data sets

• Without age- or risk-adjustment, data would not be suitable for comparison

• Agencies do not have a shared visualization tool with sufficient security to protect health information and display shared results

• 3-4 months

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Option 2: Analysis conducted by a Texas academic institution

Pros Cons Timeframe

• Could be achieved with a memorandum of understanding with UT Health Science Center at Houston Data Center, which currently has access to 91% of the Texas market’s claims data

• Each agency would receive an individualized, age- and risk-adjusted benchmark analysis

• Reporting in interactive dashboards

• Potential for collaboration with other academic institutions, on a case-by-case basis

• $5M cost in first year, with ongoing approximate cost of $4.5M per year to maintain

• 6-8 months

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Option 3: Analysis conducted by third-party vendor

Pros Cons Timeframe

• There would likely be a number of vendors interested in bidding on such a contract

• Would require a new procurement process and a coordinated request for proposal among the agencies

• More costly than executing an memorandum of understanding with an academic institution

• Minimum of 2 years

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Recommendations

• The agencies have distinct challenges based on who they serve, how they are funded, and how they deliver care

• Sophisticated and consistent reporting methods must account for demographic and health acuity differences among populations

• Attempting to make valid comparisons among programs without risk- and age-adjusted data will not produce reliable insight needed to inform decision makers

• A data analytics tool would be a valuable addition to the existing collaboration among health programs; however, it will require additional resources

Considerations

Cost of the project

• $5 million would be required to implement UT Health

Data Center project; however, a federal match may be

available for HHSC’s portion of the cost, potentially

reducing the total cost by approximately $2 million

Value-based purchasing

• Data sharing project would provide a solid foundation

for the coordination around value-based purchasing

best practices required by Article IX, Section 10.07

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Cross-agency Collaboration on Value Based Payment Strategies

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Senate Bill 1, 85 R, 2017, Article IX, Section 10.07

Senate Bill 1, 85 R, 2017, Article IX, Section 10.07

“HHSC, ERS, and TRS shall collaborate on the

development and implementation of potential

value-based payment strategies, including

opportunities for episode-based bundling and

pay for quality initiatives. To the extent possible,

these agencies shall work towards similar

outcome measures.”

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Workgroup Milestones

• Elect chairperson and adopt Workgroup Charter

• Hold regularly scheduled meetings throughout the fiscal year and engage in strategic planning sessions

• Identify focus areas for collaborative value-based and quality improvement initiatives

• Use routine meetings as an incubator for ideas and an opportunity to share problems and solutions

• Develop strategies to address focus areas across agencies

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