Appendix
4
Materials for Kansas Leadership Workshop
This
document was prepared for a Leadership
Workshop on Managed Care and Child
Health held on September 9-10, 2004
in Topeka, Kansas. The workshop is
based on work by the Center for Health
Services Research and Policy at The
George Washington University (GWU),
and conducted with support from the
Health Resources and Services Administration,
Maternal and Child Health Bureau (HRSA-MCHB)
and the Managed Care and Health Services
Financing Technical Assistance Center
(MCTAC). Senior policy makers and
professionals attending the workshop
will discuss “pay-for-performance”
and other approaches to ensure that
plan enrollees receive the highest
quality pediatric care. This information
was designed to provide a framework
for discussion, offering options for
solutions to concerns shared by State
agencies, managed care organizations,
and consumer advocates. These documents
have not been endorsed by Federal
or State officials. Prepared by Kay
Johnson, Johnson Group Consulting;
and Jeff Levi, Center for Health Services
Research and Policy under contract
with HRSA. |
I.
Pay-for-Performance as a Strategy for
Managed Care Purchasing
Why consider a pay-for-performance (P4P)
approach?
-
The Institute of Medicine Health Care
Quality Initiative has heightened consumers’
and purchasers’
awareness of the need for improvements
in the health care system. In 1996,
the Institute of Medicine
(IOM) launched a concerted, ongoing
effort focused on assessing and improving
the Nation's quality
of care, which is now in its third phase.
In 1999, To Err is Human1
delivered a “wake-up call”
about
patient safety and put quality issues
squarely on the national agenda. In
2001, Crossing the Quality
Chasm2
called for fundamental change in the
health system, including payment methods.
“The goal
of any payment method should be to reward
high-quality care and to permit the
development of more
effective ways of delivering care to
improve the value obtained for the resources
expended.”3
In 2002,
Leadership by Example: Coordinating
Government Roles in Improving Health
Care Quality45
recommended that all health-related
programs of government, including Medicare
and Medicaid,
begin paying performance bonuses.6
-
The reasons given in the typical business
case for P4P is driven by these basic
points:
-
Current provider reimbursement strategies
do not reward quality or performance.
Neither fee-forservice
nor capitated payments have effective
incentives for quality improvement.
-
Report cards on performance –
prepared by regulators, accrediting
bodies, and/or consumer
advocates – typically focus
at the plan, not individual provider
level.
- When
individual managed care organizations
(MCOs) or integrated health systems
issue their
own report cards on their physician
groups, the public is faced with
“dueling scorecards”
and
non-comparable (or incomprehensible)
data.
- In
most States, MCOs contract with
many of the same physician groups.
Thus, no one MCO has
an incentive to invest in quality
improvement of a physician group
because it will benefit the
competitors.
- While
different initiatives focus on different
methods, the general motives for
adopting P4P
approaches are to: reduce medical
errors, improve patient outcomes,
reduce acute
treatment/urgent care, minimize
clinical practice variations, link
dollars to improvement, collect
and publish quality data, and advance
information technologies.7
What are the main approaches
to performance incentives?
The National Health Care Purchasing Institute8
has identified 11 current and potential
heath care provider
incentive models, using both financial
and non-financial incentives. The models
that use financial
incentives are: bonuses, compensation
at risk, performance fee schedules, quality
grants (typically, direct
and competitive), reimbursement for care
planning, and adjusted cost sharing for
patients. The nonfinancial
incentives are: performance profiling,
publicizing performance, technical assistance
for quality
improvement, contract sanctions (threats
for loss of a contract), and reduced administrative
requirements.
The fundamental principles of P4P are:
-
Develop a collaborative approach, based
on input from MCOs, physicians, researchers,
and
consumer advocates;
-
Use a common set of measures (metrics)
based on consensus across areas of performance;
- Commit
significant financial payments based
on performance;
-
Share the facts about performance; and
-
Leverage the “power of multiples”
by making improvements across a larger
number of physician
practices and groups.
What are the key decisions in
adopting P4P?
-
What is the target? Will rewards go
to those who can reach a standard benchmark,
those who
improve, and/or those who are top ranked?
-
What is the unit of measure? For what
unit will data be reported? Is the performance
to be
measured that of an individual physician,
a provider group, or an MCO?
-
How will measures be weighted? Most
projects weigh performance in different
areas. For
example, Rhode Island assigns administration
20 percent, access 30 percent, and clinical
care 50
percent. In the Statewide initiative
in California, clinical measures are
weighted at 50 percent of the
overall score, with patient satisfaction
at 40 percent and the information technology
at 10 percent.
-
How to distribute payments? Will funds
be distributed annually or monthly?
Will payments be
lump sum, per member, or per service?
Will it be quality bonuses (in which
an annual payment is
made to those who meet performance targets),
adjusted fee schedules, and/or withholds
for
“reimbursement at risk”
(in which the funds are held back and
paid if/when minimum performance
standards are met)?
-
Where will the money come from? Will
the State reduce payments (in other
words withhold) some
Medicaid managed care dollars at the
beginning or commit new dollars? Will
MCOs create
incentive pools? Early efforts suggest
that MCOs need to offer an amount equal
to 10 percent of a
physician’s earning potential
in order to change practice behavior
(and, hopefully, in turn get desired
results).
This
document was prepared for a Leadership
Workshop on Managed Care and Child
Health to be held on September 9-10,
2004 in Topeka, Kansas. The workshop
is based on work by the Center for
Health Services Research and Policy
at The George Washington University
(GWU), and conducted with support
from the Health Resources and Services
Administration, Maternal and Child
Health Bureau (HRSA-MCHB) and the
Managed Care and Health Services Financing
Technical Assistance Center (MCTAC).
Senior policy makers and professionals
attending the workshop will discuss
“pay-for-performance” and other approaches
to ensure that plan enrollees receive
the highest quality pediatric care.
This information was designed to provide
a framework for discussion, offering
options for solutions to concerns
shared by State agencies, managed
care organizations, and consumer advocates.
These documents have not been endorsed
by Federal or State officials. Prepared
by Kay Johnson, Johnson Group Consulting;
and Jeff Levi, Center for Health Services
Research and Policy under contract
with HRSA. |
II.
Lessons Learned by Other States and Special
Projects
-
A report from the National Academy of
State Health Policy (NASHP)9
found that, of the 28 States
studied, 27 used penalties and 8 had
begun to use financial incentives. Based
on State reporting,
NASHP said that successful efforts have:
-
Experience in performance measurement
and goal-setting, which helps States
build baseline data
and holds plans accountable;
-
Extensive efforts to solicit public
input, identify priorities and objectives,
and develop public and
legislative support; and
-
A collaborative relationship with
plans, to reach fair targets and
ensure that the State will work
with them to resolve problems.
-
In 2001, the Integrated Healthcare Association
(IHA), a collaborative leadership group
in California,
launched a Statewide P4P initiative.10
This year, after three years of planning
and development, the
IHA will begin to make performance-related
payments. Patient satisfaction, clinical,
and information
technology scores are being used. Patient
satisfaction measures address four areas:
communication
with the doctor, specialty care, timely
care and service, and an overall rating
of care. The six clinical
measures cover mammograms, pap smears,
and childhood immunizations, plus a
measure for asthma,
diabetes, and coronary artery disease.
The clinical measures are weighted at
50 percent of the overall
score, with patient satisfaction at
40 percent and the IT measure at 10
percent. Each participating
health plan makes its own decisions
about the source and amount of performance-based
payments to
its physicians. Funds may come from:
(1) set-asides from future premium increases
received from
purchasers; (2) funds already budgeted
for quality incentives; (3) the total
amount budgeted for
capitation payments.
-
Rhode Island has concentrated
on improving Medicaid managed care quality
through use of
performance contracting, by setting
up clear expectations and rewarding
those that reach preset goals.
The State adopted an incentives-based,
P4P approach in 1998. The State's Medicaid
managed care
program, RIte Care, developed 22 goals
in the areas of administration, access,
and clinical care, with
the areas weighted 20, 30, and 50 percent,
respectively. At the end of the first
full year, RIte Care
paid $713,000 in bonuses to the plans
-- about half of what was available.
In the first year after the
RIte Care program started in Rhode Island,
both hospital days and emergency room
use decreased by
one-third. The State also has achieved
success in improving rates of early
prenatal care, childhood
immunization, and lead screening. For
example, Rhode Island offers bonus payments
to MCOs in
which most physicians test for lead.
The most recent figures show that 79
percent of Rhode Island
physicians do lead screening —
four times higher than the national
average. 11
- Rewarding
Results is a joint initiative
of the Robert Wood Johnson Foundation
and the California
HealthCare Foundation with grantees
in Michigan and California. Data are
collected on six
indicators: childhood immunization,
cervical cancer screening, breast cancer
screening, appropriate
use of medication for people with asthma,
LDL-cholesterol screening following
cardiovascular
events, and diabetes testing.
- Beginning
in 2003, a coalition of large employers
and health plans began to pay cash bonuses
to
physician networks in Boston, Cincinnati,
and Louisville. The program, Bridges
to Excellence, is a
quality bonus model incentive plan and
is funded by the Robert Wood Johnson
Foundation and
supported by the Federal Center for
Medicare and Medicaid Services. The
program is concentrating
on diabetes care, cardiovascular care,
and patient care management. Physicians
qualify for an annual
per-patient bonus (up to 10 percent
of annual income) when they achieve
targets. For example, a
physician receives $100 per patient
if he or she becomes a member of the
American Diabetes
Association’s Provider Recognition
Program. Employers in this coalition
include General Electric,
Verizon Communications, Ford Motor Co.,
Procter & Gamble, and United Parcel
Service.12
- Arkansas
and Maine each have
aimed to use information as incentives
in their Medicaid primary
care case management programs. Arkansas
releases a “physician report card”
so doctors can compare
referrals, hospitalizations and emergency
room use in their own practices to those
of other primary
care physicians. Maine’s incentive
program measures rates such as well-child
visits and
immunizations and provides bonuses to
doctors who demonstrate high performance.13
- Wisconsin
has long been using performance measurement
to guide purchasing and provide incentives
for quality in child health. Perhaps
as a result, four of the MCOs under
Medicaid contract are among
the top 15 performers nationwide, according
to the National Committee for Quality
Assurance. Note
that Wisconsin withholds a portion of
a health plan’s compensation if
it does not meet screening
standards for lead exposure, developmental
problems or vision difficulties.14
This
document was prepared for a Leadership
Workshop on Managed Care and Child
Health to be held on September 9-10,
2004 in Topeka, Kansas. The workshop
is based on work by the Center for
Health Services Research and Policy
at The George Washington University
(GWU), and conducted with support
from the Health Resources and Services
Administration, Maternal and Child
Health Bureau (HRSA-MCHB) and the
Managed Care and Health Services Financing
Technical Assistance Center (MCTAC).
Senior policy makers and professionals
attending the workshop will discuss
“pay-for-performance” and other approaches
to ensure that plan enrollees receive
the highest quality pediatric care.
This information was designed to provide
a framework for discussion, offering
options for solutions to concerns
shared by State agencies, managed
care organizations, and consumer advocates.
These documents have not been endorsed
by Federal or State officials. Prepared
by Kay Johnson, Johnson Group Consulting;
and Jeff Levi, Center for Health Services
Research and Policy under contract
with HRSA. |
III.
Quality Standards to Monitor Child Health
Services and Outcomes
An editorial in American Medical Association
News in January 2003 commented that: “On
the surface…
pay for performance has the potential,
depending on the bonus structure, to align
physician and payer
interests in providing the best care for
the least cost. However, when it comes
to pay for performance, the
question is: Who is defining quality?”
At the same time, the Institute of Medicine
has found that a lack of
consistency in measurement requirements,
absence of standardized performance measures,
and lack of a
conceptual framework to guide the selection
of performance measures are key barriers
to closing the
quality gap.
Sample Categories for Performance Measures/Goals
- Administration
measures
-
Affect on members
-
Interval between enrollment
and
PCP assignment/selection
- Grievances
and appeals within time
frames
-
Affect on Medicaid
-
Paying claims for covered
services
"out-of-network"
(e.g., emergency
room, public health)
- Paying
clean claims on time
-
Information technology
-
Ability to integrate/report
clinical
data in a timely manner
- Use
of decision-support software
-
Access measures
-
Geographic/travel time access
-
Time between requests and
appointments
-
Interval between enrollment
and first
PCP visit
-
Time spent in waiting rooms
-
Language access (translation)
|
- Clinical
care measures
-
Preventive care
-
Immunizations up to date
-
EPSDT screening visits / child
or
adolescent well care visits
-
First pediatric visit for infant
-
Lead screening
-
Breast and cervical cancer
screening
-
Early prenatal care
-
Chronic care
-
Asthma
-
Behavioral health
-
Cardiovascular
-
Children with special health
needs
-
Diabetes
-
Epilepsy
- Urgent/emergency
services (e.g.,
members seeking ER receive services
immediately)
- Quality
-
Patient/member satisfaction
-
Racial/ethnic disparities
|
Post-workshop Summary
September 27, 2004
MEMORANDUM
TO: |
Participant
in the Advanced Leadership Workshop
on Purchasing Quality Child Health
Services under Medicaid and HealthWave
(SCHIP) Managed Care Contracts
|
FROM: |
Kay
Johnson, Johnson Group Consulting,
Inc. Jeffrey Levi, George Washington
University
|
SUBJECT: |
Summary
of key conclusions from the September
9, 2004 meeting
|
This memo provides a summary of the key
consensus points emerging from the workshop
on pay-forperformance
in managed care purchasing as well as
a series of “next steps” and
possible strategies
identified by the participants. This workshop
was conducted with support from the Health
Resources and
Services Administration’s Maternal
and Child Health Bureau and facilitated
by Kay Johnson and Jeffrey
Levi under contract with HRSA.
Perhaps the most important consensus points
were:
-
A belief that pay-for-performance is
achievable in managed care purchasing
in Kansas,
particularly for child and family health
services.
-
A belief that a pay-for-performance
approach should provide incentives,
rather than be punitive.
-
A belief that key players in health
care purchasing and delivery, both within
the Medicaid system
and beyond, need to be part of a continuing
dialogue as discussions become more
specific about
implementation and to assure consistency
in approach to pay-for-performance for
all Kansans
receiving third-party paid health care.
-
A pay-for-performance initiative should
maximize the State’s purchasing
power and take advantage of
other related policy initiatives.
-
While the focus of the discussion was
on Medicaid and HealthWave managed care
purchasing, it
was recognized that the State purchases
health services through a variety of
mechanisms
(managed care, primary care case management,
and fee-for-service), through Medicaid
and
HealthWave as well as through other
insurance programs, such as the State
employee health
insurance programs. It was agreed that
to the degree possible, measures that
established a single
standard of care, regardless of purchasing
mechanism, should be sought. Given the
overlapping
networks of providers among the various
public and private insurance approaches,
this could be
achieved through targeted application
of pay-for-performance approaches.
-
There was general consensus among participants
that initial efforts at introducing
pay-forperformance
in Medicaid and HealthWave might build
on other initiatives that have received
broad support in the State, such as
the recommendations of the Blue Ribbon
Immunization Task
Force and independent efforts regarding
disease management for conditions such
as asthma.
-
Pay-for-performance should focus on
providing incentives for providers,
not punishing them.
-
There was a unanimous belief among participants
that a pay-for-performance approach
will be
most successful if it provides incentives
to providers (e.g., enhanced payments
or bonuses if
certain performance targets or outcomes
are achieved), rather than punishing
providers who do
not meet a certain standard.
-
There was also support for a progressive
approach to pay-for-performance –
rewarding both good
performance (i.e., achieving a particular
standard) and rewarding improvement
from a baseline
for a provider.
-
Participants also believed it was important
to focus on provider performance both
because the
State uses only one managed care organization
for children in Medicaid and HealthWave
and
because many providers see children
on a fee-for-service (FFS) or primary
care case management
(PCCM) basis.
-
Introduction of pay-for-performance
will need to be gradual to demonstrate
its value to purchasers,
providers, and consumers and to permit
the building of an infrastructure (i.e.,
electronic medical record
systems) necessary for effective pay-for-performance
approaches.
-
A short-term implementation step would
be required participation by managed
care pediatric
providers in a State childhood immunization
registry (consistent with the Blue Ribbon
Task
Force’s recommendations). This
would serve an important quality objective
(increasing
immunization rates and coordination
of immunization activities among multiple
funders and
providers) while also demonstrating
to all parties the value of better data
collection in assuring
quality outcomes and more efficiently
targeting various funding streams.
-
One mid-term objective would be the
development of consensus on measures
related to child
health performance. To develop consensus,
key stakeholders (including more pediatric
leaders)
should be engaged in an ongoing process.
Further examination of current performance
on Health
Employee Data and Information System
(HEDIS), EPSDT, and external quality
review
organization (EQRO) data related to
child health would be the basis for
identifying measures. The
group agreed on the importance of balancing
preventive and high-impact acute care
measures.
They also identified mental health and
prenatal care as areas likely to be
challenging under a payfor-
performance approach.
-
Another mid-term objective would be
the adoption of electronic medical records
systems by
providers participating in Medicaid
and HealthWave. An electronic medical
records system is
critical to effective quality monitoring
and improvement. It was suggested that
using standards
for well-child care could be used as
the prototype. Funding to build this
infrastructure among
providers was identified as a critical
issue; creative use of funding might
be needed (e.g.,
bioterrorism preparedness funds could
be used since electronic medical records
could enhance
surveillance of new pathogens).
-
The long-term objective would be to
use electronic medical records to assure
the “virtual”
integration of various funding streams,
so that providers could know where an
individual patient
or client is receiving services, regardless
of payer, and so those services could
be better
coordinated and not duplicated.
-
More players need to be part of
the discussion of pay-for-performance.
It was generally agreed that
for this approach to be successful,
additional parties needed to be part
of the discussion. Those mentioned
include, but are not limited to (in
no order of priority):
-
Office of Health Planning and Finance
-
Governor’s Office, Lt. Governor’s
Office
-
Kansas Medical Society
-
American Academy of Pediatrics
-
American Academy of Family Physicians
-
State medical managers association
-
Kansas Hospital Association
-
State employee health plan
-
Key legislative players
-
Children’s health advocates
-
Immunization program
-
Blue Ribbon Task Force leadership
-
As the discussion of pay-for-performance
for children in managed care moves forward,
a number of
strategic issues need to be addressed.
These include:
-
A broader discussion of the State’s
expectations regarding quality is needed.
What is the State
willing to commit to in terms of new
or redirected resources to assure greater
quality and optimal
performance is achieved?
-
If women and children are the focus
of initial quality efforts, a strong
case needs to be made for
the value of this targeting, given that
greater costs to the State occur in
providing for the disabled
and long-term care.
-
Why focus on preventive health issues
rather than chronic diseases? Should
the commitment be
to linking pay-for-performance to both
types of services?
-
What data is now available that could
be the basis for pay-for-performance?
-
How do funding streams now meld at the
provider and client level?
-
One-pagers are needed for policy makers
on the rationale for quality and pay-for-performance
and why certain measures or populations
are being targeted.
-
More information is needed on what other
States are doing in this area.
1
Institute of Medicine. To Err Is Human:
Building a Safer Health System. L.
T. Kohn, J. M. Corrigan, and M. S.
Donaldson, eds. Washington, D.C: National
Academy Press, 1999.
2
Institute of Medicine. Crossing the
Quality Chasm: A new Health System for
the 21st Century, Washington, D.C:
National Academy Press, 2001.
3
Crossing the Quality Chasm, p. 193
4
Institute of Medicine. Leadership
by Example: Coordinating Government Roles
in Improving Health Care
Quality, Washington, D.C.: National
Academy Press, 2002.
5
Webcast of Public Briefing: Leadership
by Example: Coordinating Government Roles
in Improving Health Care Quality.
6
Institute of Medicine. Priority Areas
for National Action: Transforming Health
Care Quality. K. Adams and J. M.
Corrigan, eds. Washington, D.C.: National
Academy Press, 2003.
7Deverich
M. Pay for Performance. Washington, DC:
PriceWaterhouseCoopers.
8National
Health Care Purchasing Institute.
Provider Incentive Models for Improving
Quality of Care.
9Kaye
N and Bailit M. Innovations in Payment
Strategies to Improve Plan Performance.
Portland, ME: National
Academy of State Health Policy 2000.
10Questions
regarding the initiative should be directed
to Ann Bowers of the Integrated Healthcare
Association, email abowers@iha.org.
Also see: IHA
"Pay For Performance" Initiative History.
11Griffin
JF, Hogan JW, Buechner JS, and Leddy TM.
The Effect of Medicaid Managed Care Program
on the
Adequacy of Prenatal Care Utilization
in Rhode Island. Am J Pub Health
1999; 89:497-501; Carrol-Silow S.
Building Quality into Rite Care: How Rhode
Island is Improving Health Care for its
Low-Income Populations. New
York: The Commonwealth Fund, 2003; Broussea,
DC, Dansereau LM, Linakis JG, Leddy T,
and Vivier PM.
Pediatric Emergency Department Utilization
within a Statewide Medicaid Managed Care
System Academic
Emergency Medicine 2002; 9:296-299.
12
Endsley S, Kirkegard M, Baker G, and Murckko
AC. Getting
Rewards for Your Results: Pay for Performance
Programs. American Academy of Family
Physicians. 2004.
13
Governing, City & State 2000.
14Dyer
MB, Bailit M, and Kokenyesi C. Are Incentives
Effective in Improving the Performance
of Managed Care
Plans? Princeton, NJ: Center for Health
Care Strategies, 2002. |