Minnesota
Value Based Purchasing
Susan McDonald
Health Care Purchasing Coordinator
Minnesota Department of Human Services
Director Governor’s Health Cabinet
P.O. Box 64998
St. Paul, MN 55164-0998
Background:
Governor’s Health Cabinet

State government working as a team:

5 agencies regulating or purchasing health care
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Purchases health care for 800,000 Minnesotans, 20% of
population

Engaged in array of private-public alliances and
partnerships to create a value driven health care
market.
Mission Statement:
Take on the state’s health care costs issues by
using its buying power to make substantive
changes to Minnesota’s health care market.
Minnesota Model to
Value Driven Health Care

Value vs. Volume
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Volume = Number of office visits, procedures,
hospital admissions x price
Value = Access + Service + Outcome
Price / Time
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Transparency of price and quality
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Electronic information exchange
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Improving health status of Minnesotans
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Engage consumers- Engage
consumers- Engage consumers
Minnesota Advantage Plan

Tiered health benefits plan for state
employees

Clinic systems placed into 1 of 4 cost level
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If a higher cost level provider is selected, the user
pays more at the point of service

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Based on risk adjusted costs and collective
bargaining
Risk adjustment -- apples to apples comparisons
Higher copays, deductible, coinsurance
Quality information provided via links to MN
Community Measurement website
4
Advantage’s key features
Information and incentives:
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Employees and families to choose high quality,
high value providers
Providers to deliver greater value, or lose
market share
Use health care wisely and protect/improve
health
Saved $30M+ in first year!
5
Advantage – How it Works
 Administration
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Self-funded program
Multiple health plan administrators are used to:

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Negotiate provider contracts and manage network
Perform core functions such as claims adjudication
 Monthly


Cost
Premium is the same for all provider groups and
administrators
When members elect a more expensive cost level,
they pay greater cost sharing each time they
receive services
6
Recognition Received
“Innovations” Award by the Council of State
Government - 2004
7
Premium Trends
2006 – 0% - Lost $20M to premium
holiday
 2007 – 9.9%
 2008 – 6.7% - Lost $16M to HRA
 2009 – 3.5%
 2010 – 0%
 2011 – 6.7% - Lost $8M to HRA

Partnering with the Private Sector
“Smart Buy” Alliance

Minnesota Smart Buy Alliance was created
to:

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

Define the reason for the gap between cost
and quality
Focus purchaser efforts to common market signal
No more cost shifting between buyers; rather use
buying power to effect change across entire market
Use common principles and goals in buying
health care

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Require or reward “best in class” certification
Adopt uniform measures of quality and results
Require the latest information technology
Empower consumers with easy access to information
Minnesota’s Health Care Environment

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One of the lowest # of uninsured in nation –
7.2%
Healthiest state in nation 4 of last 5 years
Most state-wide tools in marketplace
Most use of health savings accounts – 9.2%
Most purchase of LTC insurance – 10%
(over 50 years)
More integrated systems (hospitals & clinics)
More primary care physicians / citizen
More employer sponsored insurance
Not for profit HMO’s
Collaborative history
Tools Needed to Get Us Where
We Are Today [minnesotahealthinfo.org]
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ICSI
MN Community
Measurement
Adverse Event
Institute for Clinical Systems
Improvement – private sector
developed standards and practice
guidelines
Measurement and reporting of quality
and price information
Reporting

eValue8
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QCare / P4P
Common standards of payment

Tiered plans
Peer grouping of providers + centers
of excellence

Health Savings Accounts
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Disruptive providers
Measurement of health plan
performance
As market driver
Convenience and employer clinics,
alternate care, navigators
Connecting the Consumer to the Tools!
Electronic Information Exchange
 Minnesota HIT Goals
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E-prescribing for all providers, plans, pharmacies by
2011
Uniform administrative transaction required by 2009
Interoperable electronic health records by 2015
Governor Pawlenty initiative to provide personal health
portfolios for all state employees by 2009, all
Minnesotans by 2011
Minnesota HIT Environment

Minnesota Health Information Exchange
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Vision is to link providers to exchange clinical
information in a secure and efficient way
Includes private partners and DHS as an
investor
Launched in fall 2008 with Rx history
Discussions with technology partners to
connect the consumer and physician
The Minnesota e-Health Initiative
A public-private collaboration
established in 2004

Legislatively chartered

Coordinates and recommends
statewide policy on e-health

Develops and acts on statewide
e-health priorities

Reflects the health community’s
strong commitment to act in a
coordinated, systematic and
focused way
“Vision: … accelerate the adoption and effective use of Health Information
Technology to improve healthcare quality, increase patient safety, reduce
healthcare costs, and enable individuals and communities to make the best
possible health decisions.”
14
Source: e-Health Initiative Report to the MN Legislature, January 2004
The Value Equation
Value = Access + Service + Outcome
Price / Time

Health IT
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Interoperability
Clinical exchange –MnHIE
Patient control/owned health information- life long
personal health records
The Tipping Point:
Giving consumers the information necessary for creating a
health life!
Connecting:
Family
Health History
Family Health Management and Support
Medical Providers
Fitness
Health Monitoring Devices
Financial Management
Social Networking
Search for Information
Health Benefits
Health Assessment
Biometric Screening
Disease Management
And much more….