Gaining Influence Through Transparency & Pricing: The Colorado Experience

SCHA Annual Executive Leadership Summit

July 22, 2014

Steven Summer | President & CEO | Colorado Hospital Association

South Carolina and Colorado

• 100 hospitals and health systems• Exploring ways to increase transparency

What we have in common

South Carolina and Colorado

What we have in common

Population: 4.7 million Population: 5.1 million

South Carolina and Colorado

• Population centers clustered around interstate corridors.

• Population growth between 2000 and 2010: South Carolina: 15.3% Colorado: 16%

What we have in common

• Percent of population age 65 and older:Colorado: 12.3%South Carolina: 15.2%

South Carolina and ColoradoWhat we have in common

• Growth in population age 65 and older between 2000 – 2030:South Carolina: 133%Colorado: 218%

South Carolina and ColoradoWhat we have in common

One party holds a majority in the state senate, house and governor’s office.

Colorado’s Road to the APCD

• Journey began in 2006.

• State lawmakers passed legislation calling for a Blue Ribbon Commission on Health Care Reform.

• Commission tasked with studying and establishing health care reform models.

Colorado’s Road to the APCDSpecific commission tasks included:

• Examining health reform models to expand coverage, especially for the underinsured and uninsured.

• Evaluating reform proposals.

• Holding meetings around the state.

• Final report due to lawmakers by Jan. 31, 2008.

Colorado’s Road to the APCD

• Create a multi-stakeholder entity “Improving Value in Health Care Authority” to promote reform recommendations.

• Reduce health care costs and improve the quality of care.

• Make information on insurer and provider price and quality available to all Coloradans.

Final report included recommendations to:

Center For Improving Value In Health Care (CIVHC)

• Created by executive order as an entity within Colorado’s Medicaid agency – transitioned to 501(c)3.

• Triple Aim focus:Improving health

Improving health care quality

Reducing costs

Center For Improving Value In Health Care (CIVHC)

• Recommendation to provide public information about cost and quality led to 2010 legislation creating Colorado’s APCD.

• APCD to include side-by-side comparisons of quality and cost information and out-of pocket expenses.

APCDs in 12 States

Colorado APCD

Unique

Resides outside

state government

Data available to providers

researchers

2 hospital representatives

on governing board

Health plans mandated to submit

data

No state funding –

APCD data sales

Member Concerns

• CHA members accepted the transparency train had left the station; however, CHA and members had several concerns regarding:

CIVHC and APCD governance Access to and reliability/validity of the data Input regarding public reporting

• It was essential that CHA have a leadership role in the process that would ultimately lead to the Colorado APCD.

Protections• CIVHC exists outside of state

government.

• Hospitals have representation on the governing board.

• Hospitals are represented on APCD advisory committees.

• Recommendations related to the APCD go through the CIVHC board.

Hospital Considerations

• The APCD is available to hospitals and other providers – as providers have the most influence on driving changes in cost and quality.

• Hospitals are involved in determining what information is publicly reported.

Hospital Considerations• Hospitals also provide

input on the reliability of reporting metrics and methodologies.

• Advance access to public reports.

• Hospitals directly involved in data review and validation.

Challenges and Barriers• Medicare has publically

committed to making data available to APCDs, but the process has been slow.

• Self-insured private employer plans are not required to submit claims.

• Small group mental health claims excluded until 2013.

• Small Volumes.

Benefits For Colorado Hospitals• Potential to be valuable tool for:

Hospitals – access to information across multiple care settings

Advocacy Care improvement Practice variations

• Hospitals are at the table and in a position to influence the development and evolution of the APCD.

Timeline of Claims AvailabilityAPCD 2013 APCD 2014

CIVHC Database

• Database is evolving and will continue to do so. Pricing structure (single-use or subscription or consulting for data

analytics) Conditional on data level provided, data use and time period Affordability and access to complete data is an issue On going commitment to improve data:

o Incomplete claimso Data elements missing within claimso Provider data deficient

• Sustainability of APCD.

Colorado Launch of APCD Consumer Portal

Includes hospital-

specific data on four

procedures

Compare price,

complexity and quality

of care

Launch scheduled

June 30, 2014

Hospitals provided 30

days to review the

data

Colorado Launch of APCD Consumer Portal

CHA Concerns with APCD Consumer Portal

• Does not include sufficient data to provide defensible results.

• Half the fully insured commercial market is missing from the data set.

• Data on hospital volumes not included.

• Median calculations skew the data so that the vast majority of hospitals appeared above the median.

• Hospitals meeting the data requirements for inclusions were excluded.

CHA Concerns with APCD Consumer Portal

• The APCD provides consumers will one lump cost estimate that includes the facility price, ancillary costs and the specialist.

• Claims for Kaiser Permanente did not include physician charges placing other hospitals at a disadvantage.

APCD Consumer Portal What’s Next

• CIVHC agreed to postpone the launch.

• CHA and CIVHC continue to have productive talks.

• CIVHC is working individually with CHA and hospitals to validate the data.

• Information on hospital volumes will be added to the Consumer Portal.

• Hospitals with larger volumes of Kaiser Permanente data will be listed as “under review.”

• Statewide median information will be removed.

CHA Data Analytics• Develop and implement data

analytics capacity for financial risk modeling and payment models.

• Maximize the use of existing and emerging data sources to advocate on behalf of members.

• Identify opportunities for CHA to analyze the underlying factors contributing to geographic variations in cost and quality.

CHA Data Analytics• Utilize discharge and trauma

registry data to analyze acute injury care in the state trauma system.

• Seek to reduce health care disparities (race, language and ethnicity).

• Support efforts to ensure the transparency of meaningful and relevant health care quality and pricing information.

Priority Analytics• Bundled payments for episodes of

care.

• Develop an analytic framework to identify state and peer group variations within an episode of care:Readmission trends

Hand-offs to post-acute settings

Cost differences across continuum of care

• Understand volume and utilization trends of hospitals.

Impact of ACA Expansion -- ColoradoHospital Peer

Group Jan-Feb 2013 Jan-Feb 2014 % Change

Average Charity Care Charges per Hospital

Urban $4.7 million $2.8 million -39.6%Rural $939,000 $664,000 -29.3%

Critical Access $224,000 $145,000 -35.3%

% Medicare ChargesUrban 36.1% 35.2% -2.4%Rural 35.7% 35.3% -1.2%

Critical Access 43.1% 42.0% -2.7%

% Medicaid ChargesUrban 14.9% 18.9% 27.3%Rural 13.2% 16.8% 26.9%

Critical Access 15.3% 16.8% 9.9%

% Self Pay ChargesUrban 5.8% 4.9% -14.5%Rural 7.5% 5.8% -22.0%

Critical Access 8.5% 7.7% -10.2%

30= outside normal variation = within normal variation

January 2013 March 2013 May 2013 July 2013 September 2013 November 2013 January 2014Month

0M

2M

4M

6M

8M

10M

12M

14M

16M

18M

20M

22M

24M

26M

28M

30M

Avg. Charges ($)

Colorado Payer Mix

31

41.0%

20.4%

21.8%

8.1%6.8%

1.9%

39.7%

26.1%

21.2%

4.8%6.4%

1.9%

For Rural and Critical Access Hospitals

32

For Urban Hospitals

Colorado Uncompensated Care Volumes

Rural

CAHJan '13 Feb '13 Mar '13 Apr '13 May '.. Jun '13 Jul '13 Aug '.. Sep '13 Oct '13 Nov '13Dec '13Jan '14 Feb '14

0K

200K

400K

600K

800K

1000K

1200K

1400K

1600K

1800K

2000K

2200K

2400K

2600K

2800K

3000K

3200K

Average Charity Care per Hospital

Jan '13 Feb '13 Mar '13 Apr '13 May '13 Jun '13 Jul '13 Aug '13 Sep '13 Oct '13 Nov '13 Dec '13 Jan '14 Feb '14

0K

50K

100K

150K

200K

250K

300K

350K

400K

450K

500K

550K

600K

Average Charity Care per Hospital

Closing Thoughts• Transparency of information and accountability to the public

are a reality, but focus must be across continuum of care.

• Public and government are demanding more openness.

• Hospitals’ credibility with their communities will increasingly relate to public availability of information.

• Access to reliable data across all care settings will be a key resource for hospitals and associations.

• Associations must take a leadership role in shaping the nature of transparency and advocating on behalf of their members.

• Data analytics is new core competency for SHAs.

Questions