Measurement of Resource Use and Efficiency
L. Gregory Pawlson MD, MPH, Executive Vice President NCQA
Joachim Roski PhD Vice President, Quality Measurement
Sally Turbyville MPH, Associate Director, Quality Measurement
Academy Health
Why HEDIS® Plan Level Measures of
Efficiency (cost-quality)?
• Affordability of health care is a major concern;
crowding out focus on quality at purchaser
level
• Understanding and influencing BOTH quality
and utilization/cost is key to providing broader
access to affordable health care
• Health plans attempt to add value by favorably
impacting quality as well as mitigating
avoidable utilization/cost
• NCQA health plan accreditation, which
includes performance evaluation, is a lever to
encourage performance assessment related to
both quality and cost
Academy Health
June 2007
2
Potential Health Plans Impact on Costs
Health Plan Functions
Impact
Disease Management
Wellness Programs
Benefit Design
Network Design
Provider Payment
Utilization
Provider Contracting
Unit Price/Discount
Focus of RRU
Premium
Admin. costs, Strategic considerations, etc
Academy Health
June 2007
3
Principles of Measuring Efficiency
• Link measures of cost and quality in
construction and reporting of
measures
• Build on existing quality measures
(e.g., HEDIS®)
• Add measures of cost-resource use
• Methods must be transparent and fair
• Standardized measures and data
collection
• Begin with what can be measured now
Academy Health
June 2007
4
Health Plan Efficiency: HEDIS Measures
Quality Measures coupled with new
Relative Resource Use (RRU)
Measures for People with…
• Diabetes
• Asthma
• Acute Low Back Pain
• Uncomplicated Hypertension
• Cardiac Conditions
• COPD
First year RRU
collection in
HEDIS 2007
First year RRU
collection in
HEDIS 2008
Academy Health
June 2007
5
The RRU Measures
• Reports the relative resource use for a health
plan members with a particular condition
when compared to their risk adjusted peers
– Standard price table provided by NCQA to
appropriately weight units of services rendered to
members.
– DOES NOT use episode groupers
• When coupled with the related HEDIS
quality measures, the RRU ratios provide
a better understanding of the efficiency
or value of services rendered by the
plan
Academy Health
June 2007
6
Key Features of HEDIS RRU Measures
• Costs are risk adjusted for:
– Age
– Gender
– Presence of co-morbidities
• Exclusions of other dominant conditions
– Active cancer
– HIV/AIDS
– ESRD, etc.
• Member cost capped if exceeds specified amount
• Adjusted for enrollment and pharmacy benefit status
(medical and pharmacy member months)
Academy Health
June 2007
7
Objective of Early Adopter Pilot
• Pilot test analytic approach for full HEDIS data set
(300+ plans) submission that is in progress (June 2007)
• Do preliminary analysis of variation of quality and cost
for adults with diabetes
– Comprehensive Diabetes Care (CDC) and Relative Resource
Use for People with Diabetes (RDI) HEDIS measures
• Initial opportunity to examine performance between
HMOs and PPOs
• Gain further implementation experience prior to 2007
HEDIS data submission
• Voluntary convenience sample of 20 HMO’s and 11
PPO plans (larger than initial pilot test of measures)
Academy Health
June 2007
8
Comprehensive Diabetes Care
Quality Measures
• Quality measure results based on 2006 HEDIS (measurement
year 2005) using specifications for administrative only data
collection
• Quality measures included four process of care measures:
– Annual Cholesterol Testing
– Annual HbA1c Testing
– Eye Exam
– Monitoring for Kidney Disease
• Calculated plan level diabetes measures composite rate
– Unweighted average of measures
• Created diabetes quality plan index
– Individual plan composite rate divided by all-plan composite
average
Academy Health
June 2007
9
RRU Measure in Diabetes
• RRU ratio based on 2007 HEDIS Diabetes RRU
specifications;
– Measurement year 2005 (same as quality
measures)
• RRU results assess relative cost (i.e., standardized
price weighted resource use) by service category:
– Inpatient facility services (IP)
– Surgery & procedure services (Surg)
– Evaluation and Management (office visits)
services (E&M)
– Pharmacy, ambulatory use (Rx)
Academy Health
June 2007
10
Relative Resource Use Index for Diabetic
Patients (RDI)
• RDI calculated as ratio of observed-to- expected
(risk adjusted average) standardized costs for
patients with diabetes
• RDI index calculated
– RDI ratio divided by all-plan RDI ratio average
• Measurement of weighted resource use - not unit
price
– NCQA standardized price tables
– Cost is defined as the summarized weighted
resource use
Academy Health
June 2007
11
Observed Resource Use (PMPM)
HMO & PPO
N=31
Academy Health
June 2007
12
Total RDI & CDC
N=31
Diabetes Care:
Care: Quality
Quality and
and Cost
Cost
Diabetes
1.7
▲=HMO
● =PPO
CDC Index: Composite
1.5
1.3
1.1
0.9
0.7
0.5
0.3
1.7
1.5
1.3
1.1
0.9
0.7
0.5
0.3
RDI Index: Total Medical Services
Academy Health
June 2007
13
Variation in Pharmacy RDI & CDC
N=31
Diabetes Care: Quality and Cost
1.7
1.5
CDC Index: Composite
▲=HMO
r = .513,
sig: .003
● =PPO
1.3
1.1
0.9
0.7
0.5
0.3
1.9
1.7
1.5
1.3
1.1
0.9
0.7
0.5
0.3
RDI Index: Pharmacy Services
Academy Health
June 2007
14
Variation in IP Facility RDI & CDC
Diabetes Care: Quality and Cost
1.7
r = -.466,
sig: .025
HMO Only
N=23
CDC Index: Composite
1.5
1.3
1.1
0.9
0.7
0.5
0.3
1.7
1.5
1.3
1.1
0.9
0.7
0.5
0.3
RDI Index: Total Medical Services
Academy Health
June 2007
15
Variation in Pharmacy RDI & CDC
Diabetes Care: Quality and Cost
1.7
1.5
CDC Index: Composite
HMO Only
N=23
r = .512,
sig: .013
1.3
1.1
0.9
0.7
0.5
0.3
1.9
1.7
1.5
1.3
1.1
0.9
0.7
0.5
0.3
RDI Index: Pharmacy Services
Academy Health
June 2007
16
Summary of Findings
• PPO performance for both CDC and RDI
appeared to vary to a greater extent than HMO
performance.
• For most categories, no correlation between
cost and quality.
• Positive correlation (r= -.52) between pharmacy
costs and quality
• Negative correlation (r= +.45) between inpatient
facility costs and quality
• Results seem plausible
Academy Health
June 2007
17
Limitations
• Small overall sample size (n=31)
• Data limited to commercially insured members
• HMOs were all subsidiaries of one national health
plan.
• PPOs were all regional health plans.
• While HMOs and some PPOs submitted audited
quality measures, RRU results were not audited.
• Limitations in understanding variation within market
and between geographic regions
Academy Health
June 2007
18
RRU Measures—Moving Forward
Next Steps:
• Collect HEDIS 2007 (final late July)
– First Year Analysis of new RRU measures with
related quality measures (in collaboration with
others)
• Continue research/development
– Finalize ADA Research Pilot Project
– New study of “Replicable Factors and Practices in
High Performing Plans (with Urban Institute)
– Refinement of measures based on first year
results
– Collection and analysis of additional set of
three measures in 2008
Academy Health
June 2007
19
Final thoughts on HEDIS RRU’s
• Quality and resource use/cost may represent two
relatively independent dimensions of health plan
performance
• HEDIS RRU measures may be applicable to
integrated delivery systems (real or virtual ) with
responsibility for total care:
– Medical groups, tiered networks, PhysicianHospital Organizations
• Unclear how this will be related to individual
physician (versus network/group) measurement of
quality and resource use/cost
Academy Health
June 2007
20
Related Work on Physician Level Efficiency
Measurement
• Small sample size and heterogeneity of office
practices likely to require extensive and
complex risk adjustment of RRU/cost measures
= high cost of development
• Multiple competing commercial products
– Pros
• In fairly widespread use
• Development/maintenance supported by market
– Cons
• Limited access to understanding/testing reliability and
validity
• Multiple products used in non standard manner precludes
pooling data or comparison across practices
Academy Health
June 2007
21
Physician Level Efficiency Measurement
• Adaptation (and NQF endorsement) of
HEDIS measures for physician office practice
• NCQA implementation standards for existing
market leading RRU/cost software
• Two very different approaches used
– Person Approach—patient is the primary
unit of analysis (HealthDialog)
– Episode Approach—episodes of care are
the primary unit of analysis (Symmetry,
Medstat, others)
Academy Health
June 2007
22
Principles for Developing NCQA Standards for
Physician Level Efficiency Measures
• Reduce unnecessary complexity of program or
implement on a large-scale basis;
• Would work in diverse types of organizational
structures from preferred provider organizations to
staff model health maintenance organizations to
other population-based measurement
organizations;
• Would maximize the number of physicians and
patients who could be evaluated while reducing
error and bias; and
• Similar implementation standards for measuring
physicians’ quality and cost of care.
Academy Health
June 2007
23
Issues addressed by Physician Cost of Care
Implementation Standards
• Input data
– Can data be consistently and reliably captured by most health
plans?
– Which data are necessary, optional, or not useful for the
evaluation?
– What is the required level of detail for various types of data?
– How can common data errors and biases be avoided?
• Methods used to estimate a patient’s risk score
and expected cost
– Does the treatment of outliers produce robust results that are also
sensitive to meaningful differences in performance?
– What is the minimum number of patient or episode observations
acceptable for determining a physician’s cost of care?
– Is the reference population sufficiently similar to the application
population for key characteristics?
Academy Health
June 2007
24
Physician Level Measurement
Implementation Standards
• Physician attribution
– Are approaches to attribute responsibility for costs
to physicians commensurate with the degree of
actual or desired influence of the physician?
– Are the current attribution rules in use valid and
fair?
• After revision/public comment “final”
NCQA standards for physician level
measurement available as “electronic
publication” on NCQA website
Academy Health
June 2007
25
Discussion/Questions
Academy Health
June 2007
26