Cost of Care Trends and Strategies [DRAFT]

Transcription

1 Cost of Care Trends and Strategies [DRAFT] Allan Baumgarten Health Care Policy Consultant Gunnar Nelson Health Economist MN Community Measurement 1

2 2016 Total Cost of Care Variation $1,000 Risk Adjusted Cost Per Patient Per Month By Medical Group Commercial Patients $900 $800 $700 $600 $500 $400 $300 2

3 Variation In Price $60 Cost to read the Eye Chart $40 $20 $0 Allowed per Medical Group Average Commercial Medicaid Fee 3

4 Variation In Utilization Emergency Room Visits per 1,000 Patients per year Observed Expected Difference Group A Group B Group C Group D

5 Total Cost of Care; all costs for patient attributed (assigned) to the appropriate medical group. Evaluation of medical groups if all had the same patient mix Relative Resource Use; A comparison of the average amount of resources used. Comparison of medical groups if all had the same patient mix and same fee schedule Price Index; A comparison of the relative pricing of all medical costs. Assessment of medical groups if all had the same patient mix and practice patterns Utilization Metrics; An observed to expected ratio of 20 common utilization metrics; A medical groups utilization rate compared to the market if the market had the group s patient mix Average Cost Per Procedure; Cost of 90 frequent office based procedures and events, not adjusted for risk 4

6 Methodology Review Commercial Patients, 2016 Dates of Service Based on health plan claims Assign Patients to a healthcare provider Requirement of at least 600 patients for a medical group Include all reported costs per patient Adjust costs for medical risk and outliers Johns Hopkins Adjusted Clinical Groupings (ACG) Weights based on costs from 1,500,000 local patients Compare the average cost per patient to the market Total Cost Index Replace costs with a standard fee schedule Resource Use Index 6

7 Utilization Ratios Actual: Counts of utilization for patients attributed to TCOC report in 2015 Expected: Market wide average of utilization for patients with same risk score, age band and gender Per 1000: Actual and Expected normalized to per 1000 patients in a 12 month period Used to compare medical groups of different patient population sized 7

8 Analysis: Overall Trend Total Cost of Care Yearly change 10% 9% 5% 6% 6% 6% 6% 1% 1% 3% 2.3% 3% 3% -1% Inpatient 0% Outpatient Physician Pharmacy Total

9 Variation in Total Cost of Care 9

10 Variation in Emergency Room Visit Rates 2 Emergency Room Use Observed / Expected 2016 Commercial Patients Willmar Ortonville 0

11 Price vs Utilization High Price, Low Resource use High Price, High Resource use Relative Pricing Low Price, Low Resource use Low Price, High Resource use Relative Utilization 11

12 Price Vs Utilization 12

13 Driver of Variation: Physician Fees 2 Physician Fees Compared to Total Cost Index Physician Relative Price Index R² = Total Cost Index 1.0=Average 13

14 Driver of Variation: Outpatient Surgery 2 Outpatient Surgery (OS) Utilization Compared to Total Cost Index OS Utilization Actual/Expected R² = Total Cost Index 1.0=Average 14

15 Driver of Variation: ER Use ER Utilization Actual/Expected Emergency Room (ER) Utilization Compared to Total Cost Index R² = Total Cost Index 1.0=Average 15

16 Consolidation in Market 66% of patients at nine medical groups Patients HealthPartners Park Nic 20% All Others 34% AllinaHealth 15% Entira 2% Children's 2% Sanford Health 3% Mayo Health 4% CentraCare 4% Essentia 4% Fairview HealthEast 12% 16

17 Conclusion Commercial Patients in Minnesota 3% increase from Price explains more of variation than utilization patterns Hospital Outpatient is seeing largest growth year after year Drivers of variation in total cost of care Physician Fees Outpatient Surgery Use Emergency Room Use 17

18 Contact Information and Agenda For more information, contact us at [TBD] 18