Presentation to the IOM Committee on Core Metrics Tom Williams, Dr PH, President & CEO, IHA January 7, 2014, Irvine, California

Organization: California multi-sector healthcare leadership group Mission: Improve quality and lower costs of healthcare Approach: Multi-stakeholder collaboration incorporating performance measurement & incentive alignment Projects: Performance Measurement (efficiency, quality, HIT), Pay-forperformance, clinical data sharing, new payment methods (i.e. bundled payment), and administrative simplification Copyright 2014 Integrated Healthcare Association. All rights reserved 2

Agenda Statewide Performance Measurement Total Cost of Care (TCC) Measurement Broader Community Measurement Specific Needs and Recommendations Copyright 2014 Integrated Healthcare Association. All rights reserved 3

California Private Sector Value-Based P4P Program - Evolution Timeline 2003: First Measurement Year Quality only 2009: Appropriate Resource Use Measures added 2013: Value Based P4P Quality and Resource Use integrated into single incentive program 2007: Payment for Improvement Added Quality only 2011: Total Cost of Care Measure added Nine CA Health Plans: Aetna Anthem Blue Cross Blue Shield of California Chinese Community HP (2012) Cigna Program Participants Health Net Kaiser Permanente* (2005) Sharp Health Plan (2013) United Healthcare Western Health Advantage * Kaiser Permanente medical groups participate in public reporting only Physician Organizations: 200 medical groups and IPAs 35,000 physicians 9 million commercial HMO/POS members Copyright 2014 Integrated Healthcare Association. All rights reserved 5

California Performance Measure Set Clinical Quality: 31 process and outcomes measures focused on six priority clinical areas Meaningful Use of Health IT: 21 measures aligned with CMS and Office of the National Coordinator for HIT meaningful use requirements Patient Experience: Patient ratings of care collected from the Patient Assessment Survey, which is aligned with the CAHPS Clinician and Group survey Appropriate Resource Use: 19 measures of utilization focused on high priority areas and selected procedures Total Cost of Care: Risk-adjusted total cost of care and trend by physician organization and geography. Copyright 2014 Integrated Healthcare Association. All rights reserved 6

Total Cost of Care Measurement Navigates complex contractual and political data use issues Passed important face validity test with providers Passed rigorous reliability testing Useful for community and provider comparisons Applicable to different private and public payer communities Addresses the cost, quality and utilization conundrum Useful for new payment schemes (i.e. ACOs) Copyright 2014 Integrated Healthcare Association. All rights reserved 8

Total Cost of Care Measure Total amount paid to all providers (including facilities) to care for a member of a physician organization (PO) for a year Risk adjusted for age, gender, and health status Geographic pricing differences accounted for PO results reported for each contracted health plan, and aggregated across all contracted health plans Specifications developed by Technical Efficiency Committee; very similar to NQF endorsed measure developed by HealthPartners Copyright 2014 Integrated Healthcare Association. All rights reserved 9

Percent Change Average Total Cost of Care Population Total Cost of Care Results Change in Average Costs, 2008-2012 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 10.9% 7.3% 6.7% 4.9% $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 2008-2009 2009-2010 2010-2011 2011-2012 Baseline Year Measurement Year Percent Change Note: Changes to plan data and measure methodologies may affect comparisons across years Copyright 2014 Integrated Healthcare Association. All rights reserved 12

Broader Community Measurement California Private Sector IHA expanding statewide performance measurement footprint in California to new populations and more meaningful metrics: Medicare Five Star Managed Medi-Cal (Medicaid) ACOs Cancer Care HEDIS by Geography All using aggregated, multi-payer claims and/or quality data Testing a direct query model to collect clinical data Copyright 2014 Integrated Healthcare Association. All rights reserved 15

Broader Community Measurement California Public Sector Let s Get Healthy California State Executive Order inspired development of a 10-year plan to improve health of Californians, control health care costs and advance health equity. Includes 6 goals and 39 indicators (measures). California State Health Innovation Plan (Cal SIMs) State health innovation plan in response to CMMI grant opportunity. Key building blocks include all payer database and state/regional accountability measurement framework. Copyright 2014 Integrated Healthcare Association. All rights reserved 16

Specific Needs Public domain risk adjuster Public domain episode of care methodology/software IOM to Propose a basic, minimum slate of core metrics. Ideally (9 to 12) aligned with triple aim which are actionable. NQF endorsement and specification of IOM sponsored core metrics Copyright 2014 Integrated Healthcare Association. All rights reserved 18

Specific Recommendations Core Metrics Starter Set for Community Measurement Lower Costs -Total cost of care and trend (2) -Top episodes of care Better Quality - Early inductions before 39 weeks - End of life in Hospital - Patient experience Better Health - Obesity rate - Poverty rate - Smoking rate Copyright 2014 Integrated Healthcare Association. All rights reserved 19

Total Cost of Care Measure Data collected from health plans Total lump sum amount per member Underlying claims and encounters for risk adjustment Includes all capitation and FFS amounts for professional, facility (inpatient and outpatient), pharmacy, and other costs (e.g., DME), shared risk payments, stop loss payments, and member co-pays, co-insurance, deductibles Excludes mental health, chemical dependency, dental, vision, chiropractic, acupuncture, P4P quality incentive payments with costs above $100,000 per member per PO truncated Copyright 2014 Integrated Healthcare Association. All rights reserved 23

Total Cost of Care Risk Adjustment Purpose: Makes comparisons across POs fair by accounting for differences in member health status, age, and gender Verisk Relative Risk Score (RRS) Member health status identified through diagnosis codes on claims and encounters Members RRS scores combined to calculate PO-level and plan-level RRS scores, used to determine expected costs RRS is normalized across POs and health plans Copyright 2014 Integrated Healthcare Association. All rights reserved 24

Total Cost of Care Geographic Adjustment Purpose: Makes comparisons across POs fair by accounting for differences in input costs CMS Geographic Adjustment Factor Copyright 2014 Integrated Healthcare Association. All rights reserved 25