New Delivery Models: Implications for Performance Measurement

Laura L. AdamsPresident & CEO, Rhode Island Quality Institute, Providence, RIFaculty, Institute for Healthcare Improvement, Boston, MAImmediate Past Board Chair, National eHealth Collaborative, Washington, DCOctober 13, 2011

38th American Academy of Nursing Meeting & Conference

Performance Measurement:

Strategic Imperatives for Nursing

Some Key Drivers of U.S. Healthcare’s Cost and Quality Problems

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• How it’s financed (what’s paid for, by whom and at what price)

• How it’s delivered

There’s a urgent need to redesign BOTH…

The Prevalent (and Toxic) Financing System

• Payment to providers is on a “piecework” basis—the more pieces produced, the greater their reimbursement. Quality isn’t often figured into the payment—the worst cardiac surgeon, primary care doctor, etc., gets paid the same as the best.

• Market forces (e.g. competition) don’t work in healthcare – the more MRI machines, the more MRI’s; the more doctors per capita, the more tests and procedures per capita, regardless of need (Wennberg, et.al.).

• Providers are often harmed financially if they improve quality, safety and efficiency.

• Little incentive to produce efficient, effective care—in fact— a financial disincentive to produce it.

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Then there’s the delivery system…

The current system fragments patient information resulting in errors and inefficiency

Adapted from: Indiana Health Information Exchange

Primary Care (incl. Behavioral Health/Substance Abuse, CHCs, Free Clinics, etc.)

Specialty Physicians

Ambulatory Centers (e.g. imaging centers)

Payers

Pharmacies

Laboratories

Patients and Families

Hospitals, LTCs, BH /SA Facilities, etc.

Public Health

Dept. of Health

• A complex, fragmented, & confusing system• Very little coordination• Very little or no incentive to limit care• Inadequate data to assess cost-effectiveness , cost

growth or utilization trends• Variations in care with no apparent benefits• Despite our best intentions, harming patients and

families every hour of every day

Summary of Today’s Healthcare:A Familiar Story

Coverage Expansion Financing Delivery System Reform

2010 • Coverage for non-dependent children through age 26• Prohibition on denying coverage to children with pre-existing conditions• Small business subsidies to provide coverage to employees• High risk pools for those denied coverage

• Tanning salon tax takes effect• Market basket adjustment to DRG rates

• Patient-centered outcomes research• Community transformation grants• Gainsharing; global payment demos• Hospital value-based purchasing

2011 • Five year opt-in long term care program begins

• Medicare Advantage payments restructured

• Center for Medicare and Medicaid Innovation launched

2012 • First industry fees take effect•Medicare Advantage bonuses take effect•Hospital productivity adjustment

• Medicare Shared Savings Program (ACOs)• Hospital Readmission Reduction Program• Independence at Home Demonstration

2013 • Increased payments to primary care physicians take effect

• New Medicare tax takes effect• Passive income tax takes effect• Excise tax on medical devices takes effect

• Bundled payment pilot begins

2014 • Health Benefit Exchanges created• Individual, employer mandates take effect• Medicaid expanded to 133% of Federal Poverty Level (FPL)

• Individual, employer penalties take effect• Disproportionate Share Hospital (DSH) payment adjustments take effect

• Independent payment advisory board begins submitting recommendations

2015 • Payment adjustments for hospital-acquired conditions takes effect

2016 • Individual, employer penalties rise

2018 • Excise tax on “Cadillac” health care plans

• The majority of the savings come from hospitals; Essentially, hospital are creating new business models• Reduction of potentially-avoidable admissions, re-admissions & ED

visits• Reduction of duplicate diagnostic tests• Greater efficiencies/fewer complications during stays

• Hospitals must integrate (virtually and otherwise) with their communities like never before• Community-based providers• Quality improvement collaboratives• Community-wide health IT initiatives • Community-wide metrics to track performance

Some Implications of New Payment Systems

• Payment Reform: Physicians, hospitals, long-term care providers, etc. will be paid to produce quality—not financially harmed for doing so

• Quality Improvement/Delivery Redesign: Now a key business strategy for physicians, hospitals, long-term care facilities and other health care providers

• Health Information Technology: The necessary foundation for improving quality and succeeding financially

New Competencies and New Opportunities

Hard to track and improve key metrics such as preventable hospitalizations and ED visits

Adapted from: Indiana Health Information Exchange

Primary Care (incl. Behavioral Health/Substance Abuse, CHCs, Free Clinics, etc.)

Specialty Physicians

Ambulatory Centers (e.g. imaging centers)

Payers

Pharmacies

Laboratories

Patients and Families

Hospitals, LTCs, BH /SA Facilities, etc.

Public Health

Dept. of Health

HIEs Represent New Opportunities for Performance Measurement

Adapted from: Indiana Health Information Exchange

Primary Care (incl. Behavioral Health/Substance Abuse, CHCs, Free Clinics, etc.)

Specialty Physicians

Ambulatory Centers (e.g. imaging centers)

Payers

Pharmacies

Laboratories

Patients and Families

Hospitals, LTCs, BH /SA Facilities, etc.

Public Health

Dept. of Health

Health InformationExchange

Potential Unintended Consequence of ACOs, Bundled Payments, etc.?

Adapted from: Indiana Health Information Exchange

Primary Care (Incl. Behavioral Health/Substance Abuse, CHCs, Free Clinics, etc.)

Specialty Physicians

Ambulatory Centers (e.g. imaging centers)

Payers

Pharmacies

Laboratories

Patients and Families

Hospitals, LTCs, BH /SA Facilities, etc.

Public Health

Dept. of Health

Community-wide HIE

A Sampling of What Patients & Families Are Telling Us About the Role of Health IT

• We want to be full-fledged members of the care team: “Nothing about me without me”.

• We don’t want to be lost in the healthcare system or have to “navigate” it.

• We do more to manage our care than you do. Please keep that in mind in designing new IT-enabled systems. We need access to our own information just as badly as you do—probably more so. We consider the data we supply as just as important as the data that the healthcare system supplies.

• We want our information to follow us—anytime and anywhere.

• We want control over access to our information--this means that you don’t freely distribute it or block its flow without our consent.

Implications for Performance Measurement

• Measurement will have to be designed to reflect the performance of the health care system across communities and across proprietary boundaries – not just within individual health systems/ACOs

• There will be great opportunities for performance measurement created by some community or state-wide health information exchanges (HIEs)• Data across proprietary boundaries• Comprehensive, longitudinal databases

• Patient/consumer reported metrics are becoming critically important as new models of health and wellness are created

Laura Adams, President & CEO Rhode Island Quality Institute

235 Promenade Street, Suite 600Providence, Rhode Island, 02908

ladams@riqi.org 401-276-9141 extension 271

Contact Information