Volume to Value: Quality Based
Purchasing for Policymakers
Council of State Governments / Eastern Regional
Conference
August 17, 2010
Portland, ME
Trish Riley, Director
Governor’s Office of Health Policy and Finance
www.maine.gov/healthreform
“You Get What you Pay For”
• US spends 2X other developed nations but does not get
better health or quality
• More surgery, without better outcomes
• Physicians see more patients and are paid more despite
same distribution of generalists: specialists
• 10% fewer in-patient beds but pay 4X other nations per
bed
Source: McKinsey Global
1
“Every System is Perfectly Designed to
Get the Results it Gets”
Maine:
 $400 M in potentially avoidable
hospitalizations
 30% higher ED use than U.S.
 1.3 M People; 39 Hospitals
 Fee for service environment
2
Where are we headed?
Integrated system
capitation
Outcome measures;
large % of
total payment
Global DRG
fee: hospital, postacute,
and physician
inpatient
Less Feasible
Care coordination
and intermediate
outcome measures;
moderate % of total
payment
Global DRG fee:
hospital only
Global ambulatory
care fees
More Feasible
Global primary care
fees
Blended FFS and
medical home fees
Preventive care; management
of chronic conditions
measures; small %
of total payment
FFS and DRGs
Small MD
practice:
unrelated
hospitals
Primary care MD
group practice
Multi-specialty
MD group
practice
Hospital
system
Integrated
delivery
system
Source: Commonwealth Fund
3
How are we getting there?
• Provider & Payer Demos & State Initiatives
• Maine Health Management Coalition
• Patient Centered Medical Homes – 26 Sites
• Policy Approaches
•
•
•
•
State Health Plan
Capital Investment Fund (Supply drives demand)
Hospital Cooperation Act
CON Criteria – Must address health care variation
and ED use
4
Legislature established Payment Reform
Workgroup and endorsed principles for
reform
- Part of Advisory Council on Health
Systems Development
Charge:
1)
Consider research & Implications for payment reform.
2)
Assess merits of reform against principles.
3)
Develop consumer awareness.
4)
Identify statutory and regulatory changes needed to advance
models for payment reform
5)
Design a 3-yr. demo to advance payment reform models
Report to Jt. Committees on Health and Human Services and
Insurance and Financial Services – 1/15/2011
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Core Principles of Payment Reform
A.
B.
C.
D.
E.
F.
Support integrated, efficient and effective systems of
care delivery and payment
Promote a patient centered approach to service
payment and delivery
Encourage and reward prevention and management of
service
Promote the value of care over volume to measurably
lower costs
Promote payment and processes that are transparent,
easy to understand and simple to administer for
patients, providers, purchasers and other stakeholders
Balance the interests of patients, providers and payers
while pursuing necessary change.
6
Payment Reform and the ACA
• Numerous opportunities for demonstrations
• Exchange as new marketplace – vehicle to
advance payment reform
www.maine.gov/healthreform
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