Healthcare Value Purchasing: Perspectives from Employers, Facilities and Consumers

Size: px

Start display at page:

Download "Healthcare Value Purchasing: Perspectives from Employers, Facilities and Consumers"

Linda Carr
5 years ago
Views:

1 Healthcare Value Purchasing: Perspectives from Employers, Facilities and Consumers Montana Chamber of Commerce Healthcare Forum November 29-30, 2016 Shane Wolverton SVP CORPORATE DEVELOPMENT, QUANTROS Cori Cook, J.D. OWNER, CMC CONSULTING Steve Loveless, MHA PRESIDENT/CEO, ST VINCENT HEALTHCARE

2 Provider Quality Assessment: A Requirement in the Employer Journey Towards Greater Value

3 Premium Growth Fuels Change 147MM Employees Reflected in Survey 63% of FTEs had Employer Coverage $617B Annual Increase of Employer Contributions $213B Annual Increase of Worker Contributions 2016 Quantros, Inc. All rights reserved. 3

6 A Wealth of Information Creates a Poverty of Attention (Herbert Simon)

8 Why Don t All Ratings Agree? Methods Constructed Range from Selected to ALL Diagnoses & Procedures Some Include Financial/Operational Indicator Some Use Hospital Reputation as Assessed by Docs Some Use AHA Hospital Survey Some Use Self-Reported Hospital Survey Some Use 30 Day Mortality for Limited Diagnosis (CMS All Cause) 30 Readmissions for Limited Diagnosis (CMS All Cause) 2016 Quantros, Inc. All rights reserved. 8

9 Why Don t All Ratings Agree? Some Use Unadjusted Referral Survival Rates Some Use Unadjusted Readmission Rates Some Use ALOS (May Be Unadjusted) Some Use $/Cost (May Be Unadjusted) Some Use Ambulatory Process Measures Some Use Inpatient Process Measures Some Use Structural Measures Differences in # & Type of Hospitals Included Etc Quantros, Inc. All rights reserved. 9

10 CMS Satisfaction Star Ratings Misleading The Centers for Medicare & Medicaid Services star-ratings system has already been the target of considerable criticism, and a new study finds that the ratings emphasis on patient experience doesn t produce reliable care quality data Quantros, Inc. All rights reserved. 10

11 CMS Satisfaction Star Ratings Misleading Researchers from Quantros, a safety and quality software provider, found that nearly half of five-star hospitals had composite outcome scores below the national average with two-, three-, and four-star hospitals having the lowest percentage of poor performing hospitals Quantros, Inc. All rights reserved. 11

Risk mislabeling individual hospitals (poor specificity) Dr.

14 JAMA Study Finds Flaws with Methods Krumholz research indicates HealthGrades Quality Rankings: 1. Do not provide adequate discrimination among hospitals in the same rating category (no individual scoring) 2. Risk mislabeling individual hospitals (poor specificity) Dr. Harlan Krumholz Department of Cardiovascular Medicine at Yale University National Authority on Clinical Quality Research and Advisor to CMS, AMA, AHA, and The Joint Commission Source: Modern Healthcare, February 15, 2010, p Quantros, Inc. All rights reserved. 14

All Methods Should be Scrutinized Changes made in wake of criticism last year over flaws in its criteria January 13, 2014 By Zack Budryk A Comparion Medical Analytics (Quantros) study last May

15 All Methods Should be Scrutinized Changes made in wake of criticism last year over flaws in its criteria January 13, 2014 By Zack Budryk A Comparion Medical Analytics (Quantros) study last May highlighted several perceived flaws in the criteria used for U.S. News' rankings, arguing that the reputation measure was overly subjective and that surveys using other, more objective measures produced entirely different rankings. Copyright Quantros, Inc. Quantros.com 2016 Quantros, Inc. All rights reserved. 15

16 What s Behind the Ratings Matters America s Best Hospitals o Rankings Based On: - Reputation (Highly Subjective) - 30 Day Post-Discharge Mortality (Single Outcome) - AHA Survey (Nurse Staffing, Technology, and Etc.) - Hospital Overall Patient Safety for Limited Indicators o Not an Overall Quality Award (Excludes Complications, Service Specific Patient Safety, Process of Care & Patient Satisfaction) o Only Reviews High Risk Services Across 16 Specialties From FFY o Hospital Performance Rankings Do Not Account for Differences in Statistical Significance 2016 Quantros, Inc. All rights reserved. 16

17 What s Behind the Ratings Matters America s Best Hospitals o Ranking Weightings: % Reputation (Approximately 20% Survey Response Rate) % Mortality - 30% AHA Survey - 5% Hospital Overall Patient Safety o Not All Hospitals Included For Each Specialty o o 694 Hospitals for Cardiology & Heart Surgery on Low End 1,674 Hospitals for Pulmonology on High End o Hospital Must be a Member of COTH, or Affiliated with a Medical School, 200 Staffed Beds, or 8 Important Technologies 2016 Quantros, Inc. All rights reserved. 17

18 Better Value is Driven by Better Analysis

We All Have Our Opinions on Quality It ain't

It's what you know for sure that just ain't so.

Clinical & Risk Adjustment is Foundation Severity Stage or progression of disease (Identified by the single CC which has the greatest impact on resource

, patient age) Number and type of CCs present upon admission that increase resource consumption independent of severity and intensity (e.g., 2 vs.

20 Clinical & Risk Adjustment is Foundation Severity Stage or progression of disease (Identified by the single CC which has the greatest impact on resource consumption) Intensity Complexity Risk Non-clinical factors that increase resource consumption independent of severity (e.g., patient age) Number and type of CCs present upon admission that increase resource consumption independent of severity and intensity (e.g., 2 vs. 6 substantial CCs) Patient characteristics that increase the probability for adverse clinical outcomes (e.g., mortality, complications, readmissions, and patient safety events) 2016 Quantros, Inc. All rights reserved. 20

21 Research From Harvard Medical School Study Selection Examined 3 severity systems: APR-DRGs, Disease Staging, and MedisGroups regarding the ability to produce accurate and consistent assessments of expected death rates for: CABG, AMI, Stroke and Pneumonia. Conclusion Severity does not adequately explain death rates across hospitals and assessments of mortality are inconsistent across severity systems. Source: JAMA (November 1997) 278 (19): pp Quantros, Inc. All rights reserved. 21

22 Composite Quality Rating Done Properly Quality Measure Statistic (e.g., Actual / Expected Mortality Rate = Index) Z-Value (Relative Level of Statistical Significance) Z-Score (Standardize Distribution of Z-Values to a Bell-Shaped Curve) Percentile (Mortality Quality Score based on Underlying Z-Scores) 2016 Quantros, Inc. All rights reserved. 22

23 Does Quality Performance Really Vary?

28 Take Aways» There is Still Significant Cost & Quality Variance Across Markets, Hospitals & Physicians» There Are Many Outlets of Provider Assessment KNOW THE DATA!» Clinical & Risk Adjustments Need to be Peer Reviewed & Robust» Severity Adjustment Alone is NOT Sufficient» Work HARD to Translate to Internal Stakeholders» Know That Greater Value CAN BE FOUND! 2016 Quantros, Inc. All rights reserved. 28

29 Healthcare Transparency

30 Cost of Healthcare Fully Insured Self-Funded Patient Responsibility Premiums Co-Pays Deductibles Co-Insurance

31 Cost of Healthcare Medical bills cause more than 60% of personal bankruptcy in this country. 75% of those individuals have health insurance employee earnings increased 60%, premiums increased 213%, and employee contributions to premiums increased 242% Reuters/KFF

34 To Be Determined We ll bill you later

45 Current Montana Law State Health Care Policy ( MCA) It is the policy of the state of Montana to continue to investigate and develop strategies that result in all residents having access to quality health services at costs that are affordable. Montana's health care system should ensure that care is delivered in the most effective and efficient manner possible; Health promotion, preventative health services, and public health services should play a central role; Patient-Provider relationship should be a fundamental component; Individuals should be encouraged to play a significant role; Accurate and timely health care information should play a significant role; Market-based approaches should be relied on whenever possible; Health care reform in Montana should be carried out gradually and sequentially; The need to increase emphasis on the education of consumers of health care services is recognized; and Consumers should be educated concerning the health care system, payment for services, ultimate costs of health care services, and the benefit to consumers generally of providing only those services to the consumer that are reasonable and necessary.

46 Current Montana Law Patient s Right to Know Act: Title 50, Chapter 4 MCA Legislative Purpose: , MCA To provide health care consumers with better information on the cost of their medical care, including the cost that will be paid by their health insurer and the portion that they will have to pay themselves, and to introduce elements of competition into the marketplace.

47 Current Montana Law Disclosures Required of Health Care Providers MCA Upon request, a Provider must provide a patient with its estimated charge for a health care service or course of treatment that exceeds $500. Estimate must be provided for a service that a patient is receiving or has been recommended to receive. The estimate must be provided at the time the service is scheduled or within 10 business days of the request. The estimated charge: Must represent a good faith effort to provide accurate information Is not a binding contract upon the parties; and Is not a guarantee that the estimated amount will be the charged amount or will account for unforeseen conditions.

48 Current Montana Law Disclosures Required of Health Insurers MCA An Insurer must provide, upon request, a summary of the insured's coverage for a specific health care service or course of treatment when the actual charge or estimate of charges by a Health Care Provider exceeds $500. The Insurer must make a good faith effort to provide accurate information. The Insurer is only required to provide information based upon cost estimates and procedure codes obtained by the insured from the insured's Provider.

49 Affordable Care Act Section 2718(e) of the Public Health Service Act requires that [e]ach hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital's standard charges for items and services provided by the hospital, including for diagnosisrelated groups established under section 1886(d)(4) of the Social Security Act.

50 Draft Legislation Amendments to the Patient s Right to Know Act Provider must publish billed charges for 100 most common inpatient and outpatient procedures and services. Providers must make charge master available upon request.

51 Draft Legislation Amendments to the Patient s Right to Know Act Requiring Providers to include applicable CPT codes in estimate. Allowing Agents/Health Insurers to request the estimate. Requiring Providers to include contact information for their billing office. Excluding emergency medical services from estimate requirements.

52 Draft Legislation Amendments to the Patient s Right to Know Act Providers must advise patients in writing of these rights when care is scheduled and post notices of these rights in their waiting room and billing office. Providers are prohibited from sending Patients to collections or sending negative information to a credit-reporting agency if they fail to comply with these requirements.

53 Cori M. Cook, J.D. (406) Have a Merry Christmas and a Blessed New Year!!

54 Healthcare Value Purchasing: Pricing Transparency Steve Loveless, MHA President and Chief Executive Officer, St. Vincent Healthcare and Montana Regional Market Executive, SCL Health 54 Sisters of Charity of Leavenworth Health System, Inc. All rights reserved.

55 55

56 56

57 57

58 58

59 59

60 Healthcare 60

61 Segmented Care 61

62 Approach in Transition 62

63 A Closer Look 63

64 Continuum of Care 64

65 What Does The Future Hold? 65

66 The Care Delivery Value Chain: A Case Study 66

67 A Closer Look At The Typical Path of Patient Care: Knee Replacement 67

68 Considerations to get to price What is the procedure? What is the payer source? What is the plan within the payer source? Is there co-insurance? What is the deductible/is it met? Is the patient in our out of network? Is the provider employed or independent? Is the provider in our out of network? What are the patient comorbidities? What are the provider preferences for this procedure? Is what was anticipated in the surgical intervention what occurred? Is the recovery as anticipated, is there a post acute stay, and a repeat of the questions 68

69 Price Alone Is Not The Answer 69

70 Determinants of Health? Steven A. Schroeder, M.D., We Can Do Better Improving the Health of the American People, New England Journal of Medicine, 357:12, p. 1221, Sept. 20,

71 What do consumer s value? 71

72 Conceptual Shift Life Prolonging Care Medicare Hospice Benefit Not this Life Prolonging Care Dx Palliative Care Hospice Care Death But this 72

73 What Is The True Cost Of Care? 73

74 Montana Hospital Association Pricing 74

75 Why is this so difficult? Traditional healthcare structure has led to segmentation As consumers we lack the expertise Payer options, coding, billing and pricing processes are complex Price alone is not the answer Need to understand the total cost of care Individual providers don t have all the information needed 75

76 Other considerations on this journey? The consumers role and accountability How to address the not so easy to see cost drivers How do we reconcile our own mortality 76

77 77

78 Our Future 78

79 Healthcare Value Purchasing: Panel Discussion Shane Wolverton SVP CORPORATE DEVELOPMENT, QUANTROS Cori Cook, J.D. OWNER, CMC CONSULTING Steve Loveless, MHA PRESIDENT/CEO, ST VINCENT HEALTHCARE

Building Actuarial Cost Models from Health Care Claims Data for Strategic Decision-Making. Introduction. William Bednar, FSA, FCA, MAAA

Building Actuarial Cost Models from Health Care Claims Data for Strategic Decision-Making William Bednar, FSA, FCA, MAAA Introduction Health care spending across the country generates billions of claim