The Role of Health IT In Payment Reform. Robert S. Galvin, MD HIT Symposium July 2, 2009

Transcription

1 The Role of Health IT In Payment Reform

2 Takeaways Significant changes in payment are being discussed Payment changes will drive delivery system reorganization Different provider organizations have distinct HIT needs The types and pace of payment reforms are unclear It makes sense for HIT leaders to understand payment reform issues 2

3 Directional Change Payment Reform Pay For IT P4P Meaningful Use Stimulus Package Outcomes: IT Inside BTE IHA PQRT VPB Evolution 3

4 Payment Reform: Big Picture 4

5 History Since Quality Chasm Report 100% 89% Cumulativ e Increase 50% Costs 0% Quality (AHRQ report) 12% Quality/Cost = Value 5

6 Payment Should Favor The Upper Left Quadrant 120 Distribution of Interventional Cardiologists: Cleveland Quality Score Source: UHG Episodes of Care Analysis, claims All data risk and severity adjusted. MDs limited to those with >20 UHG cases (with the exception of some MDs who saw customer patients- added for purposes of showing actual customer volume) Efficiency (Cost (Cost Compared to to Market Average)

7 Purchaser Vision High Value of Health Expenditures Transparency Performance Comparisons Aligned Incentives MD/Hospital Quality & Cost Improvement Clinical Re- Engineering Higher Quality Lower Cost Healthier Population Payment Reform is Rate-Limiting Step Prevention Low 2000 Key Evolutionary Steps???

8 Broad Agreement MedPAC 2004 (2004) Institute of Medicine (2006) Current payment systems... are at best neutral and at worst negative towards quality The Secretary of... DHHS... should implement pay-forperformance in Medicare using a phased approach.... If I keep getting better, Dr. Galvin, I m going to improve myself right out of business 8

9 Today s System Understandable, predictable and operational, but.... Fee-for-service incentivizes volume Unrelated, or negative, towards quality Pays more for procedures than cognitive services Current system of update (SGR) unworkable DRGs: case rates but volume still an issue No payment for coordination of care You Get What You Pay For 9

10 Payment Reform: State-of-Play 10

11 Will Health Reform Address Payment Issues? Focus. Delivery System Change Including Payment Reform Financing Considerations... Time 11

12 Trends in Payment Reform Changes to today s system Pay more for primary care Reduce payment for avoidable costs/errors New fee for care coordination... e.g., medical home New models away from FFS Episodes or case rates Bundling Global payments accountable care organizations Included in any new model Performance-based bonuses or shared savings 12

13 The Newest New, New Thing Accountable Care Organizations Conceptual framework is sound... at a high level Global payments address volume Scale and organization enable coordination and care management Good results from ACO s (e.g. Kaiser, Mayo, Geisinger, IHC) Advocates suggest using payment system as a lever to drive delivery system to ACO s Challenge is to translate concept into action Lots of Enthusiasm 13

14 Irrational Exuberance? ACO s comprise less than 15% of the delivery system It always looks easier than it is Unintended consequences incompletely understood 14

15 Theory-to-Reality Is Humbling Initial Lessons From the First National Demonstration Project on Practice Transformation to a Patient-Centered Medical Home P.A. Nutting, MD, et.al. Annals of Family Medicine May/June 2009 Our early analysis raises concerns that current demonstration designs seriously underestimate the magnitude and time frame for the required changes, overestimate the readiness and expectations of information technology, and are seriously undercapitalized. We fear that with current assumptions, many demonstrations place participating practices at substantial risk and may jeopardize the evolution of the PCMH as unrealistic expectations set up demonstrations and evaluations for failure. 15

16 Double-Edged Sword of Size Doctors Hospitals. Integration Consolidation Improved Outcomes Lower Costs Higher Prices ± Improved Outcomes 16

17 1Q09 (Excludes High Cost Claimants) 10% 8% Facility Outpatient Facility Inpatient PRICE 6% 4% 3% 2% 0% Physician Inpatient Rx Labs Physician Outpatient Mental Health -2% Radiology -4% -8% -6% -4% -2% 0% 2% 4% 6% 8% USE 17

18 Center for Payment Reform (CPR) Who We Are: Coalition of consumers, purchasers, labor, providers and payers focused solely on payment reform Mission and Goals: Establish a common set of payment reform principles Foster alignment between public and private sectors Focus on how payment changes are determined Highlight unintended consequences of proposed changes with recommendations to mitigate Lead payment reform change on the private sector side

19 Short-Term: No One Size Fits All Fee-For-Service Episode/Condition- Based Payment Population- Based Payment Pay-for-Performance Reforms Will Vary Based on Market Conditions Delivery system infrastructure Active payment initiatives 19

20 Longer-Term: We Need a Strategy Payment Options Reform FFS or move away completely? Are bundled payments and case rates viable concepts... or does the tyranny of the volume incentive over-shadow the positive? Is global payment the holy grail... and should we commit to it? Evidence-Base Need for research, evaluation of new payment models Along with funding stream 20

21 Implications for HIT 21

22 Payment Reform and HIT Beyond a (really good) initial improvement in reducing waste & stopping glaring errors, HIT isn t going to create continued improvement in value until the payment system incentivizes the outcomes that HIT enables Payment Reform & HIT: Two Mutually Dependent Pieces of System Infrastructure 22

23 Payment Reform Will Drive Delivery System Changes Fairly Certain Increased payment for Coordination Accountability Outcomes clinical & financial Fairly Uncertain Will small practices really disappear? Will larger groups be hospital based? Is virtual integration a viable option? How fast does this all take place? For HIT: Some Tough Strategic & Business Decisions 23

24 Delivery System Changes Will Influence HIT Strategy Large hospital-physician organizations need complex enterprise systems Independent physician offices need practical, operational products Integrating doctor s offices virtually is another kettle of fish Hospitals themselves have evolving needs HIT Leaders Should Stay Current With Payment Reform Changes 24

25 Final Words of Wisdom It s Tough To Make Predictions, Particularly About The Future 25