Integrated Healthcare Association Innovation Through Collaboration Annual Report 2011 Innovation Through Collaboration™ Our Vision Healthcare that promotes quality improvement, accountability, and affordability, for the benefit of all California consumers. Our Mission To create breakthrough improvements in healthcare services for Californians through collaboration among key stakeholders. How We Achieve Our Mission Accountability IHA promotes accountability and transparency by promoting healthcare standards, measurements, rewards and public reporting. Breakthrough Collaboration IHA leverages its distinctive strength – the ability to bring together leaders from key sectors of healthcare in California – to promote innovation through both individual and collaborative efforts. Education and Information IHA supports a visible, ongoing effort to promote healthcare improvement by educating and informing the general public, policymakers, other associations and organizations through the media and other methods. Policy Influence IHA seeks to influence policy issues that support its mission through information exchange, public positions and collaboration by key stakeholders. Project Development IHA serves as a catalyst by initiating and coordinating projects that advance solutions for delivery system challenges. The Principles that Guide Us In organizing and carrying out its work, IHA: •Operates a shared governance model based upon trust, and open dialogue; •Seeks to remain a limited-membership policy board, but with representation from a broad cross-section of the healthcare industry; •Solicits senior decision-maker participation from its member organizations; •Considers academic, business/purchaser, and consumer perspectives in its discussions, including but not limited to, board representation; •Promotes ideas, solutions, and points of view to policymakers, but does not lobby on specific pieces of legislation; •Promotes incentives to align the interests of various healthcare stakeholders; •Seeks to develop consensus, but believes open, active dialog and debate on important issues is productive, even if a consensus cannot be reached. Dear IHA Members, Affiliates, Stakeholders, and Friends: I am pleased to present our first Annual Report. I believe that it validates IHA’s evolution from our early days as a networking organization to our current status as an active leadership group serving an important role in today’s California healthcare community. Leveraging the combined efforts of the IHA Board, its member organizations, affiliates, stakeholders, and many program participants, we have established a foundation of collaboration and trust. Building upon this foundation we have accomplished a great deal toward our mission to improve the quality and affordability of healthcare in California. Reflecting back on the past year, I believe we lived up to our motto, “Innovation through Collaboration.” As you read this report, I hope you will agree. As you know, the implementation of the Affordable Care Act brought significant changes to healthcare in 2011. Within our state, we have witnessed significant efforts to implement insurance reforms, and to prepare for the California Health Benefit Exchange, Medicaid expansion and growth, and many other reform initiatives. New accountable care delivery models and collaborations between health plans, hospitals, and physician organizations have been launched, and many organizations are strengthening and adjusting their market position through mergers, acquisitions, or other strategic initiatives. Amidst these 2011 developments, IHA has continued to ask the question, “How can we be helpful?” The answer has come in a variety of forms, including our programmatic work focused on collecting and aggregating cost and quality information, measuring performance, and testing payment innovations. We have freely shared the practical knowledge and lessons learned from these efforts through conferences, publications, and numerous presentations by our staff. More recently, we have worked to influence policy relevant to our programmatic work through policy briefs, forums, and participation in statewide and national leadership groups. During the past year, our flagship California Pay for Performance (P4P) Program delivered Total Cost of Care testing results to participating physician organizations and health plans for the first time, and the P4P committees continued their hard work to transition the program to Value Based P4P, which incorporates both cost and quality. The IHA Bundled Payment Demonstration Project, funded by a grant from the Agency for Healthcare Research and Quality, completed its first fiscal year with slow, but deliberate progress. A standardized, coded Division of Financial Responsibility (DOFR) was completed by an IHA-convened workgroup, and a number of other projects were started and moved forward. 2011 was a busy and exciting year for IHA! I hope you will learn more about our organization from this Annual Report, and that you will work with us in the future to improve healthcare for all Californians. Sincerely, Tom Williams, Dr.P.H. President and Chief Executive Officer 1 Our Greatest Asset Is Our Board of Directors Unlike a trade association that aims to represent one sector of healthcare, IHA has balanced representation from hospitals/health systems, health plans, and physician organizations. Our Board membership additionally includes representatives from government, academic, purchaser, consumer and other sectors to ensure that “all are at the table.” Our unique ability to convene cross-sector organizations to collaborate on challenging industry issues and projects is one of our greatest assets. 2011 IHA Board Officers Chair Bart Asner, M.D. Chair-Elect Elaine Batchlor, M.D. Past Chair Don Rebhun, M.D. Treasurer David Joyner 2011 Board Directors Physician Groups Beaver Medical Group (EPIC Management),Charles Payton, M.D., Vice President and Chief Medical Officer Family Care Specialists Medical Group, Hector Flores, M.D., Medical Director HealthCare Partners, Donald J. Rebhun, M.D., Regional Medical Director Hill Physicians Medical Group, Steve McDermott, Chief Executive Officer Monarch HealthCare, Bart Asner, M.D., Chief Executive Officer Palo Alto Medical Foundation, Richard Slavin, M.D., President and Chief Executive Officer The Permanente Medical Group, Philip Madvig, M.D., Associate Executive Director Santé Health System, Scott B. Wells, President and Chief Executive Officer Sharp Rees-Stealy, Jerry Penso, M.D., Medical Director, Continuum of Care Hospitals and Health Systems Catholic Healthcare West (now Dignity Health), John Wray, Senior Vice President, Payer Strategy and Growth Cedars-Sinai Health System, Richard Jacobs, Senior Vice President, System Development John Muir Health, Paul Swenson, Executive Vice President, Administration MemorialCare Medical Centers, Barry Arbuckle, Ph.D., President and Chief Executive Officer Providence Health and Services, Michael Hunn, Senior Vice President and Regional Chief Executive Stanford Hospital and Clinics, Jenni Vargas, Vice President for Business Development Sutter Health, Jeffrey Burnich, M.D., Senior Vice President and Executive Officer Tenet California, Ronald L. Kaufman, M.D., Chief Medical Officer Public Hospital (vacant) Health Plans Aetna, Greg Stevens, Senior Vice President, Network Management, West Anthem Blue Cross, Jeff Kamil, M.D., Vice President and Senior Medical Director Blue Shield of California, David Joyner, Senior Vice President, Large Group and Specialty Benefits CalOptima, Trudi Carter, M.D., Chief Medical Officer Cigna Healthcare of California, Peter Welch, President and Chief Executive Officer Health Net of California, Martha Smith, Chief Provider Contracting Officer Kaiser Foundation Health Plan, William B. Caswell, Senior Vice President, Operations L.A. Care Health Plan, Elaine Batchlor, M.D., Chief Medical Officer UnitedHealthcare, Sam Ho, M.D., Vice President and Corporate Medical Director 2 Secretary Barry Arbuckle, Ph.D. Purchasers and Consumers CalPERS, Ann Boynton, Deputy Executive Director, Benefit Programs Policy and Planning Center for Healthcare Decisions, Marjorie E. Ginsburg, Executive Director Disney Worldwide, Barbara Wachsman, Senior Executive, Employee Health Benefits Keenan, Henry Loubet, Chief Strategy Officer Monterey County Schools Insurance Group, Sherrell Freeman, Executive Director At Large Genentech, Cheryl Silberman, Ph.D., Therapeutic Head, Metabolics GlaxoSmithKline, Karen Hamby, Vice President, Integrated Healthcare Markets McKesson Corporation, David Nace, M.D., Vice President and Medical Director Merck & Company, David Abrahamson, M.D., Senior Medical Director, Western Region Stanford University, Graduate School Of Business, Alain Enthoven, Ph.D., Marriner S. Eccles Professor of Management TriZetto, Jeff Rideout, M.D., Senior Vice President, Cost & Care Management and Chief Medical Officer UC Berkeley School Of Public Health, James C. Robinson, Ph.D., Leonard D. Schaeffer Professor of Health Economics Liaison (Non-Voting) California Children’s Hospital Association, Cindy Ehnes, President and CEO California Department of Managed Health Care (vacant) Centers for Medicare & Medicaid Services, Region IX, David Sayen, Regional Administrator Stanford University, School Of Medicine, Arnold Milstein, M.D., Director, Clinical Excellence Research Center UC Berkeley School of Public Health, Stephen M. Shortell, Ph.D., Dean IHA Funding The sources of IHA revenue are from program administration fees, grants from private foundations and federal agencies (e.g., the Agency for Healthcare Research and Quality), Board membership dues, Affiliate program membership dues, conferences and other sources. The majority of IHA expenses are for program services, with a relatively small percentage for management and general operations, and membership development. Funding 2011 reVeNue SOurCeS 10% 19% 2011 exPeNSeS 25% 4% 10% 46% 25% Grants Program Administration Fees 46% Membership & Affiliate Dues 19% Other revenue (conferences & other) 86% Program Services Membership Development Management & General 86% 4% 10% 10% 3 Highlights from Our Work Value Based P4 P is a key step in holding organizations responsible for both the quality and cost of care delivered to their members. 4 Value Based Pay for Performance and Total Cost of Care The California P4P program began in 2003 and is a story of consensus building and engagement. The program enables physician organizations to earn health plan incentive payments based upon performance against a set of 85 quality and efficiency measures. Results are publicly reported and top performers are recognized in a yearly awards ceremony. IHA is responsible for collecting data, deploying a common measure set, and reporting results on behalf of eight health plans and 200 physician organizations comprised of almost 35,000 physicians that care for almost 10 million members. It is the largest non-governmental physician incentive program in the United States. P4P has successfully raised awareness and acceptance of the use of objective measures in healthcare quality performance, increased accountability of health plans and physician organizations, and helped identify variations in clinical care results related to socioeconomic status. Attention has now expanded to measurements of resource use and costs, and assessing the value of care delivered by considering these alongside quality. In response to affordability concerns, IHA developed a measure of Total Cost of Care (TCC) that captures the costs for care delivered to all commercial HMO/ POS enrollees in each P4P participating physician organization. The TCC measure includes all covered professional, pharmacy, hospital, and ancillary care, as well as administrative payments, and is risk-adjusted to capture differences in patient population characteristics across physician organizations. Measuring and understanding the drivers of total cost of care are key steps to assist providers in moderating the steep upward trend in healthcare costs. IHA is working with its stakeholders to transition the P4P program to Value Based Pay for Performance to incorporate both cost and quality into health plan incentive payments to California physician organizations. Value Based P4P is a key step in holding organizations responsible for both the quality and cost of care delivered to their members, and is aligned with the national movement towards Accountable Care Organizations. Bundled episode of Care Payments IHA is implementing a demonstration project funded by the Agency for Healthcare Research and Quality to test the feasibility of bundling payments to hospitals, surgeons, consulting physicians and ancillary providers for selected inpatient surgical procedures. The demonstration is expected to enable improved patient care quality and efficiency, and facilitate shared savings among health plans, providers, employers, and patients. The demonstration will include rigorous evaluations that will be developed independently by the RAND Corporation and by researchers associated with the University of California at San Francisco and Berkeley. To date, IHA has recruited many facility and professional organizations to participate in the program, and has completed extensive work to rigorously define six episode procedures including: total knee and hip replacement, knee arthroscopy with menisectomy, cardiac catheterization, cardiac angioplasty with stents, and partial knee replacement. Data consultants and health plans have worked collaboratively to provide hospital participants with comprehensive data sets critical to episode price setting and contract templates developed to assist health plan/provider negotiations. Two health plans completed contracts in 2011 and are awaiting initial patients. In addition to the demonstration project work, IHA plans to submit an application to the Center for Medicare & Medicaid Services Innovation Center (CMMI) to serve as “convener” for up to 29 California hospitals as part of the CMMI Bundled Payments for Care Improvement initiative. Our goal is to provide superior outcomes and patient value. Bundling payment to the healthcare team – creating a single price for the patient’s care over the whole episode of treatment – will align the financial incentive with the clinical goal. Administrative Simplification – Division of Financial responsibility In partnership with a number of healthcare stakeholders, IHA developed a coded Division of Financial Responsibility (DOFR) template for use in contracts involving capitation between health plans, physician organizations, and hospitals. The DOFR provides a framework for these organizations when allocating financial responsibilities for services and includes a standard set of 104 health care service categories and 10,000 associated billing and revenue codes. It gives health plans and providers a uniform starting point for capitated payment negotiations and assignment of risk. The standard set of service categories and associated codes help organizations define lines of responsibility, reduce payment ambiguities, minimize administrative burdens associated with managing multiple risk relationships, and lower costs associated with misdirected claims (“claims ping-pong”) that also lead to consumer frustration with their care experience. Simplifying the administrative relationship between health plans and capitated hospitals and physician organizations is critical to affordable care. 5 IHA Helping to Lead the Way California, with its history in managed care and its numerous accountable care-like provider organizations, is a state on the cutting edge of health reform. As a result, private and public policy makers nationally are highly interested in California innovations to improve quality and affordability. Through our work, IHA draws the attention of national policy makers and we share our experiences freely, both successes and failures, influencing programs and policies in many states and at the Federal level. California Focus Our programs and projects support IHA’s mission to improve quality, accountability, and affordability in California healthcare by leveraging our unique multi-stakeholder leadership and organizational capabilities. Pursuant to this, our projects and programs operate only within California, and help solve problems unique to California’s healthcare environment. IHA is engaged in numerous Boards, Committees, and statewide forums, including the California Department of Managed Health Care’s Financial Solvency Standards Board (FSSB), the California Quality Collaborative (CQC), the California Chartered Value Exchange and others. In 2011, IHA also participated in its first California Health Policy Forum in Sacramento, sponsored by the Center for Health Improvement, to share expertise on payment reform, value based pay for performance, bundled payment, and ACO initiatives. 6 National Influence Although IHA has a California focus, the organization offers its experience and expertise to national policy makers and thought leaders through information, education, public positions, collaboration with key stakeholders, and staff participation in various national forums and initiatives. For example, IHA staff participate on the American Recovery and Reinvestment Act (ARRA) HITECH Eligible Professional Clinical Quality Measures Technical Expert Panel, the Measure Applications Partnership clinical workgroup convened by the National Quality Forum (NQF), the NQF Resource Use Steering Committee and related endeavors. IHA is also an active member of the Network for Regional Healthcare Improvement (NRHI), which provides an opportunity to collaborate with similar organizations across the country on cross-sector programs and solutions, and to engage on national reform topics and issues. In addition to publishing its second white paper on Accountable Care Organization for PPO Patients: Challenge and Opportunity in California, our 2011 National ACO Congress, sponsored jointly with the California Association of Physician Groups, was again a great success and opportunity for national leaders and implementers of ACOs to share their progress. 2011 staff speaking engagements that provided an opportunity for IHA to influence national policy include: Centers for Medicare & Medicaid Services (CMS) Meeting on Evidence of Coverage and Payment; CMS Measures Forum on the topic of Computing Value – combining quality and cost measures; Agency for Healthcare Research and Quality (AHRQ) Learning Network for Chartered Value Exchanges on Community Collaborative Experiences with Multi-payer Programs; and the AcademyHealth Roundtable on bundled payments. Issue Brief No. 1 September 2011 Redesigning Insurance Benefits and Consumer Cost-Sharing for High-Cost Surgical Services James C. Robinson, PhD Leonard D. Schaeffer Professor of Health Economics Director, Berkeley Center for Health Technology Kimberly MacPherson, MBA, MPH Program Director, Health Policy & Management Associate Director, Berkeley Center for Health Technology School of Public Health, University of California, Berkeley Issue Brief T No. 2 September 2011 he fragmentation of payment methods undermines efficiency and quality of care due to its effects on both providers and consumers. This effect is espe- Aligning cially Consumer Cost-Sharing withprocedures that encompass pronounced when considering high-cost surgical multiple caregivers and facilities. On the provider side, each physician now Episode typically of Care (EOC) Provider Payments is paid individually regardless of the total cost and final outcome of The Integrated Healthcare the patient’s care, while the hospital is paid per discharge or based on the number Association is coordinating an of days the patient is in the facility. The care provided before and after discharge James C. Robinson, PhD episode of care payment often Professor is even more fragmented and involves an additional cast of providers and Leonard D. Schaeffer of Health Economics initiative involving prominent facilities. this Technology contemporary scheme, there is little incentive for any one Director, Berkeley CenterUnder for Health health plans, hospital systems, caregiver to pay attention to the outcome of the patient’s entire course of care, Kimberly MacPherson, MBA, MPH and physicians organizations as distinct from each caregiver’s individual contribution. One major objective of Program Director, Health Policy & Management in California. shifting to bundled payment for all services provided during the episode of care Associate Director, Berkeley Center for Health Technology (EOC) is to create incentives for collaboration among all participants. School of Public Health, California, Berkeley is almost no impetus or ability to compare On theUniversity consumerofside, there currently Issue Brief No. 3 September 2011 price and quality across alternative clinical treatments and provider organizations. The consumer’s out-of-pocket cost-sharing responsibility typically is comprised of a confusing mix of deductibles, coinsurance, copayments, and annual out-of-pocket pay- a bundled episodehe Integrated Healthcare Association (IHA) is coordinating ment maximums that do of-care not promote choice. Consumers (EOC)informed, paymentcost-conscious project for knee and hip replacement surgery, which often must pay out-of-pocket for at leastinto partother of thediagnostic ambulatoryand services thatprocedures. might will be expanding surgical It bears many forestall the need forsimilarities expensive surgery, but also thensome oftendifferences bear no responsibility for the Acute Care Episode to, though from, Medicare’s cost implications ofMPH, whether to have surgery, where tofor have it, and which implantable The Integrated Healthcare (ACE) payment demonstration orthopedic and cardiac surgery. As organized to Emma Dolan, MPP, Policy Analyst device to use as part of the procedure. In this sense, consumers are both under-insured Association is coordinating an date, the IHA project changes the way hospitals and physicians are paid by health Dolores Yanagihara, MPH, Director, Pay for Performance Program over-insured forplans high-cost hospital surgery procedures as payment episode of careand but does notand alterambulatory the structure of the patients’such cost-sharing obligations. angioplasty, and bariatric surgery. limitation of the project. The IHA now project for kneeorthopedic and hip surgery, cardiac This omission represents a meaningful ABSTRACT: In response to affordability concerns, the California Pay for Performance www.iha.org Thewhich Integrated Healthcare Association (IHA) is coordinating caremove towards EOC replacement surgery, is re-examining consumer benefit design an in episode light ofofthe (P4P) Program has developed a measure of Total Cost of Care (TCC) that captures Published by Integrated Healthcare payment initiative involving will be expanding into other providerprominent payment. health plans, hospital systems, and physithe costs of care delivered to all commercial HMO/POS enrollees in each P4PAssociation and sponsored by the cian organizations in This California. In order to the support that initiative, it isinalso diagnostic and surgical Issue Brief describes need for benefi t re-design the context of the moveCalifornia Healthcare Foundation participating physician organization. The TCC measure includes all covered profesexplore EOC the state of innovation in benefit design and t options specifically to towards procedures. sponsoring a project ment payment methods. It gives examples of benefi sional, pharmacy, hospital, and ancillary care, as well as administrative payments, and © 2011 how those emerging could supportacute EOCcare payment methods. This fordesigns the types of high-cost procedures that are the Issue focus of the IHA initiative. Integrated Healthcare Association is risk-adjusted to capture differences in patient population characteristics across All rights reserved Brief describes the These need for benefiinclude t redesign and the principal thatout-of-pocket must options coinsurance with a obstacles high annual maximum, physician organizations. Measuring and understanding the drivers No. 4 September 2011of total cost of care reference pricing, and “Centers of Excellence” contracting. The concludes by 1 Brief are key steps to assist providers in moderating the upward trend in healthcare costs. considering the extent to which payment reform and benefit redesign can supple another. ment one another and also be used as substitutes for one T Measuring Total Cost of Care Issue Brief INTRODUCTION: AFFORDABILITY CONCERNS AND Value Based Pay forTHE Performance inRE-DESIGN California NEED FOR BENEFIT THE MOVE TOWARDS MEASURING “VALUE” The principle that benefi ts shouldAssociation be redesigned to bemanages compatible Theinsurance Integrated Healthcare (IHA) the with California Pay for and supportivePerformance of EOC payment supported by the health plansnon-governmental and provider (P4P)isProgram, which is the largest physician Measuring andAnalyst understanding Emma Dolan, MPP, MPH, Policy organizations participating in the IHA episode initiative,inalbeit theMPH, driversDirector, of Total Cost of Care incentive program in the Unitedpayment States. Founded 2001,for thissomeprogram represents Dolores Yanagihara, Pay for Performance Program distinct reasons. The running principalU.S. goals and potential expressed to are key steps to assistwhat providers results the longest example of datachallenges aggregation and standardized www.iha.org date by the stakeholders EOC payment include: in moderating the upward trend reporting around across diverse regions and multiple health plans. IHA runs the program on ABSTRACT: Value Based Pay for Performance is a new strategic initiative that is Channeling patient volume to reward provider participation ininsured EOC payment Published by Integrated Healthcare costs. in healthcare behalf of eight health plans representing 10 million persons, being adopted by the California Pay for Performance Program to incorporate both and is responAssociation and sponsored by the The move from fragmented to bundled payment imposes meaningful administrasible for collecting data, deploying common measure set, and reporting results for cost and quality into health plan incentive paymentsa to California physician organiCalifornia Healthcare Foundation tive costs on participating provider organizations to sharpen internal approximately 35,000 physicians in and overthreatens 200 physician zations. This initiative aims to help address affordability concerns that organizations have arisen (PO). © 2011 disagreements over division ofhas revenues between physicians and the hospitalthat encompassThe the P4P Programin created a successful collaboration Integrated Healthcare Association due to the overwhelming increases HMO premiums overstatewide the past decade.Value organization.esSome provider organizations participating indata thecollection bundled payment All rights reserved uniform performance measures, aggregated and validation, a trusted Based P4P gives participating physician organizations the potential to earn a qualitygovernance process, single public report for POs inquality California. Over the life adjusted shared savings payment basedand onatheir performance oncard both cost and No. 5 December 2011 1 of theP4P program, performanceresponsible improvements have been achieved in metrics. Value Based is a keysteady, step inincremental holding organizations for both the quality healthcare by P4P participants, however the quality and cost of careofdelivered to delivered their members, which is aligned withthe thedramatic increase in California’s healthcareCare costsOrganizations, over the past decade has overshadowed national movement towards Accountable and should help create quality gains. response to theseproduct. concerns, IHA’s P4P Program has begun a transition to Value a more competitive,In value-based HMO Based P4P, which encompasses both cost and quality, as its overarching goal over the of this new strategic direction is a measure of Total Cost next five years. The foundation INTRODUCTION: EMBRACING COST of Care (TCC) developed by MODERATION the P4P Technical Efficiency Committee. This brief outlines Value Based P4 P is a key AS A STRATEGIC TCCIMPERATIVE specifications, the process of risk adjustment, TCC implementation, and the implistep in holding organizations Emma Dolan, MPP, MPH, Policy Analyst cations of total cost(P4P) of care measurement for the futureinfrastructure of the California P4P Program. The California Pay for Performance Program has created a robust responsible for both the quality to measure the quality of care delivered to HMO/POS enrollees by physician organizaand cost of care delivered to www.iha.org INTRODUCTION DOES TCC MEASURE? tions in this state.WHAT Founded in 2001, this program represents the longest running U.S. their members. Published by November On 1, 2011, CAPG hosted a Safety Netresults ACO roundtable as part example ofIHA dataand aggregation and standardized reporting across diverse TCC measures actual payments associated with care for regions all commercial HMO/ Integrated Healthcare Association National ACO Congress in Los Angeles. This roundtable of the Second and multiple health plans. The Integrated Association (IHA) runs the proPOS enrollees in a PO,Healthcare including all coveredfocused professional, pharmacy, hospital, © 2011 primarily on a case study of HealthCare First South Los Angeles, a safety net ACO gram on behalf ofand eight healthcare, plansasrepresenting 10 million payments insured persons, and is ancillary well as administrative and adjustments. Participating Integrated Healthcare Association of plans Charity Health System (DCHS), John’s Well includes Daughters responsible for collecting data, deploying a common measure set, andfor reporting results All rightsinitiative reserved that health report a single lump sum St. payment each contracted PO to a data Child and Family Center, St. Francis the in Southside Community(PO). for approximately 35,000Center, physicians over 200Coalition physicianof organizations 1 No. 6 February 2012 Health Centers,Since Los Angeles Department of Health Services, and of private on measurthe program’s inception, stakeholders havea number focused primarily primary anding specialty care physicians, in however, partnership with L.A. and improving quality; during this Care, time, Los the Angeles costs of care have County’s public health to plan. continued rise unabated. This has fueled concerns over the long-term sustainThe panelists of St. John’s, Mangia, CEO Collis, Senior abilitywere of theJim HMO product in California, and Conway focused the attention of P4P stakeHealth reform ... is a real Government Counselor and Chiefon Affairs Officer for DCHS, and Dr. Elaine Batchlor, holders cost alongside quality. opportunity for physicians, the Chief Medical Officer ofthe L.A.P4P Care. The session wasimproved moderated by Dr. Kevin In response, Program adopted value, which encompasses hospitals, and other Grumbach, both who cost is Chair of the Department of goal Family andbetween Community Medicine and quality, as the ultimate of P4P 2011 and 2015. The primary organizations to work Analyst at thePolicy University of California, Santhis Francisco, as wellBased as a practicing physician at initiative for reaching goal is Value Pay for Performance (Value Based together to “createEmma betterDolan, MPP, MPH, San Francisco General Hospital. P4P), which will hold POs accountable for the costs of all care provided to their mousetraps” in the Medi-Cal A number of themes emerged from the quality roundtable, including necessity of POs and INTRODUCTION HMO members, as well as the of this care, andthe will help to align delivery system. www.iha.org evolution in health the healthcare delivery system to provide high-quality, effi cient careused in the plans a more price-competitive HMO product. Data ontoward healthcare provider performance are increasingly by both purchasers safety net; the diffiand culties of overcoming access and demographic to deliver and to design Published by health plans to publicly report on healthchallenges system performance Integrated Healthcare Association integrated, coordinated care; the importance of gaining and maintaining support from PRIMARY OBJECTIVES OF VALUE BASED P P value-based purchasing initiatives, such as4“tiered” physician networks. In these a wide variety ofprimary stakeholders; and the primacy of ain strong care base upon © 2011 The objectives of Value Based P4P are primary to reorder the priorities of the P4P initiatives, providers are placed cost-sharing tiers based on their cost and/or Integrated Healthcare Association which to build accountable care organizations. Program to emphasize cost control and affordability; to continue to promote quality; towhen quality performance, and consumers face lower cost-sharing requirements Issue Brief Building ACOs in the Safety Net: Lessons from HealthCare First South Los Angeles Issue Brief Reliability in Publicly Reported Performance Data: Framing the Debate All rights reserved they choose higher-quality and/or lower-cost providers. 1 IMPLEMENTING HEALTHCARE REFORM: THE IMPORTANCE Public reporting and value-based purchasing initiatives are meant to provide conOF A STRONG DELIVERY SYSTEM sumers with more data on health system performance, as well as incentives to choose Dr.provider Batchlor began thevalue panelproviders. with a discussion the changing Medi-Cal landscape high There is of limited data on whether and how public reporting and Public reporting and in up California, callyhave from the Affordable Act and the state’s stemming 1 but these practices have opened up debate tiering impacted consumer behavior, Care tiering have opened debate specifi Section under many Medi-Cal fee-for-service enrollees will about the which reliability of the underlying performance data and thebeappropriateness of about the reliability of the1115 waiver, managed care. L.A. is undertaking pilots toitbetter integrateand introduces the transitioned use. This brief defiCare nes reliability, outlines why is important, underlying performance data into its care forof certain populations, as dual who already transitioning debate on thesuch reliability of eligibles data needed forare public reporting and provider tiering. and the appropriateness into managed care, and children with special healthcare needs. The plan is also its use. www.iha.org Published by Integrated Healthcare Association © 2011 Integrated Healthcare Association All rights reserved working with L.A.WHAT CountyIS onRELIABILITY? early expansion of insurance coverage in preparation for 2014. Consider a primary care physician who receives a score of 78% on a measure of L.A. Care is seeking to encourage the development of a stronger healthcare cervical cancer screening. Does this score actually mean that the physician has delivery system that can provide high-quality, coordinated care for an increasing only screened 78% of eligible patients under his or her care? This question deals number of Medi-Cal enrollees, who have traditionally been challenging to manage. with both validity — whether a measure accurately reflects what you are attemptHealth reform, Dr. Batchlor stated, is a real opportunity for physicians, hospitals, and ing to measure — and reliability, which describes how well the measure results other organizations to work together to “create better mousetraps” in the Medi-Cal actually capture true performance. www.iha.org Published by Integrated Healthcare Association © 2012 Integrated Healthcare Association All rights reserved Reliability has three primary drivers: the first is sample size, with larger patient 1 populations driving more accurate results; the second is the presence of meaningful difference between those subject to measurement; and the third is measurement error. It ranges in value from zero to one, where zero means that any variability in the results is due to measurement error, and one means that the results perfectly capture variability in performance with no measurement error. Reliability is one of the National Quality Forum’s (NQF) “Scientific Acceptability” Measure Evaluation Criteria that must be satisfied in order for a measure to be considered for NQF endorsement. To meet NQF’s reliability requirements, a measure must be well-defined and precisely specified to allow for uniform implementation and comparability, and must also be tested to ensure that it produces consistent results over repeated tests.2 1. For example, see Anna D. Sinaiko and Meredith B. Rosenthal, “Consumer Experience with a Tiered Physician Network: Early Evidence.” American Journal of Managed Care 2010;16(2): 123-130; Eric C. Schneider and Arnold M. Epstein, “Use of Public Performance Reports: A Survey of Patients Undergoing Cardiac Surgery.” Journal of the American Medical Association 1998;279(20): 1638-1642 2. National Quality Forum (NQF), “Measure Evaluation Criteria.” January 2011. http://www.qualityforum.org/ docs/measure_evaluation_criteria.aspx#note1. 1 7 Sharing Our Knowledge Pictured at right: 2011 National ACO Congress Keynote Panel: Juan Davila, Blue Shield of California; John Wray, Catholic Healthcare West (now Dignity Health); Ann Boynton, CalPerS; Steve McDermott, Hill Physicians Medical Group National Accountable Care Organization Congress Los Angeles, CA (co-produced with the California Association of Physician Groups) National Pay for Performance Summit San Francisco, CA 8 Since the inaugural National Accountable Care Organization Congress in October 2010, there was a flurry of both government and private sector activity to define and implement the ACO concept. With special emphasis on the burgeoning commercial ACOs that are springing up all over the country and, according to some experts, defining the future of the ACO movement, the second National ACO Congress brought together leading policymakers, experts, and those working at the frontline of ACO implementation to provide unique and in-depth insights on what has been done so far, and what the ACO concept means for the future of healthcare. The three-day conference was packed with keynote presentations from AHIP, the Commonwealth Fund, the CMS Innovation Center, and others, as well as four pre-conferences and nineteen concurrent sessions that offered participants a chance to learn more about the Medicare Shared Savings and Pioneer ACO programs, the Premier ACO collaborative, private sector ACO partnerships, and Medicaid and safety net-focused ACOs. As we prepared for the 2011 National Pay for Performance Summit, healthcare delivery in the United States was set to experience unprecedented change. The Affordable Care Act put healthcare quality and payment reform front-and-center with plans for a national strategy for healthcare quality, performance measurement and reporting initiatives for Medicare and Medicaid providers, performance-based payments for hospitals and physicians, and numerous payment reform pilots and demonstration projects. The 2011 National Pay for Performance Summit was perfectly timed, as CMS had released many of the new regulations required under the Act, and participants heard from individuals within government about the impacts that these regulations will have on care delivery. Participants also learned from leaders in the field working to implement innovative quality improvement and payment reform programs. For decades, we have worked tirelessly to improve healthcare quality, access, and efficiency, and we see the Affordable Care Act as a validation of this work. The 2011 Pay for Performance Summit gave us, along with nearly 650 attendees, a chance to reflect on how far we have come, and what we need to do in order to move forward. In late 2011, driven by the reported early successes of the CMS Acute Care Episode demonstration and the planned expansion of the project in 2012, both healthcare delivery systems and commercial payers began gearing up to pay for medical treatment on the basis of the “episode of care” or “bundled payments” rather than fee-for-service or capitation. Bundled payment also represents a critical first step in aligning incentives that promote cooperation amongst physicians, hospitals, and health plans to advance both quality and cost improvement. Many providers and payers are considering bundled payment as a logical first step on the path toward full ACO implementation. At the First National Bundled Payment Summit, participants heard directly from government leaders about the impacts that new CMS regulations will have on care delivery. Attendees also heard from leaders in the field working to implement episode bundled payment and related programs in both the public and private sectors. We came away from the conference full of new information about key issues – clinical, analytic, measurement, payment – and all the other factors involved in implementing a bundled payment program. National Bundled Payment Summit The Integrated Healthcare Association’s Pay for Performance (P4P) Stakeholders Meeting is the annual forum for all California P4P participants and other stakeholders to receive key program information, share successes and challenges, access P4P-related services, and discuss future program direction. Reflecting the importance of measuring and rewarding both quality and cost-efficiency, IHA celebrated its 10th year of physician organization measurement and reporting in 2011. This year’s program focused on: Total Cost of Care testing results; changes to the P4P Measure Set; transition to Value Based P4P; and best practices and learnings. And like every year, the physician organizations that demonstrated the highest level of achievement for the 2010 Measurement Year, as well as the physician organizations that demonstrated the most quality improvement, were announced and recognized during the luncheon awards ceremony. California Pay for Performance Stakeholders Meeting Washington, D.C. Los Angeles, CA 9 2011 Committees IHA executive Committee Barry Arbuckle, Ph.D., MemorialCare Medical Centers Bart Asner, M.D., Monarch HealthCare Elaine Batchlor, M.D., L.A. Care Health Plan Alain Enthoven, Ph.D., Stanford University Graduate School of Business Richard Jacobs, Cedars-Sinai Health System David Joyner, Blue Shield of California Steve McDermott, Hill Physicians Medical Group Donald Rebhun, M.D., HealthCare Partners Tom Williams, Dr.P.H., Integrated Healthcare Association IHA Membership and Nominating Committee Elaine Batchlor, M.D., L.A. Care Health Plan Henry Loubet, Keenan Donald Rebhun, M.D., HealthCare Partners Richard Slavin, M.D., Palo Alto Medical Foundation Barbara Wachsman, Disney Worldwide Tom Williams, Dr.P.H., Integrated Healthcare Association John Wray, Catholic Healthcare West (now Dignity Health) P4 P executive Committee Michael Belman, M.D., Anthem Blue Cross Sam Ho, M.D., UnitedHeathcare David Hopkins, Ph.D., Pacific Business Group on Health Steve McDermott (Chair), Hill Physicians Medical Group Arnold Milstein, M.D., Stanford University Jerry Penso, M.D., Sharp Rees-Stealy Bart Wald, M.D., HealthCare Partners P4 P Steering Committee Michael Belman, M.D., Anthem Blue Cross Gerald Bishop, M.D., Aetna Daniel Bluestone, M.D., Santé Community Physicians Michael-Anne Browne, M.D., Blue Shield of California Sophia Chang, M.D., California HealthCare Foundation Marjorie Ginsburg, Center for Healthcare Decisions Alan Glaseroff, M.D., Humboldt-Del Norte IPA Jennifer Gutzmore, M.D., Cigna Healthcare of California Sam Ho, M.D., UnitedHealthcare David Hopkins, Ph.D., Pacific Business Group on Health Don Hufford, M.D., Western Health Advantage Michael Kern, M.D., John Muir Health Philip Madvig, M.D., The Permanente Medical Group Robert Margolis, M.D., HealthCare Partners Steve McDermott, Hill Physicians Medical Group Arnold Milstein, M.D. (Chair), Stanford University Jerry Penso, M.D., Sharp Rees-Stealy Sandra Perez, Office of the Patient Advocate Leslie “Les” Schlaegel, Stanford University Lawrence Shapiro, M.D., Palo Alto Medical Foundation Neil Solomon, M.D., Health Net of California Randy Solomon, Anthem Blue Cross Ulrike Steinbach, Ph.D., Blue Shield of California Julie Wade, GlaxoSmithKline Bart Wald, M.D., HealthCare Partners Melissa Welch, M.D., Aetna Tom Williams, Dr.P.H., Integrated Healthcare Association P4 P Payment Committee Bart Asner, M.D., Monarch HealthCare Juan Davila, Blue Shield of California Alain Enthoven, Ph.D., Stanford University Sam Ho, M.D., UnitedHealthcare Don Hufford, M.D., Western Health Advantage Steve McDermott, Hill Physicians Medical Group Arnold Milstein, M.D., Stanford University Aldo De La Torre, Anthem Blue Cross Martha Smith, Health Net of California Greg Stevens, Aetna Bart Wald, M.D. (Chair), HealthCare Partners Peter Welch, Cigna Healthcare of California P4 P Technical Quality Committee Kristy Alvarez, Pacific Business Group on Health Michael-Anne Browne, M.D., Blue Shield of California Cheryl Damberg, Ph.D., RAND Ellen B. Fagan, Cigna Healthcare of California John Ford, M.D., Family Practice Physician Joel Hyatt, M.D., Southern CA Permanente Medical Group 10 Stuart Levine, M.D., HealthCare Partners Jerry Low, Anthem Blue Cross Eileen O’Connor, Health Net of California Jerry Penso, M.D. (Chair), Sharp Rees-Stealy Paul Solari, M.D., Genentech Ann Woo, PharmD, Hill Physicians Medical Group P4 P Technical Efficiency Committee Daniel Bluestone, M.D., Santé Community Physicians Bruce Davidson, Ph.D., Cedars-Sinai Health System Dan Gross, Sharp HealthCare David Hopkins, Ph.D. (Chair), Pacific Business Group on Health Paul Katz, Intelligent Healthcare Ranyan Lu, Ph.D., UnitedHealthcare David Redfearn, Ph.D., Anthem Blue Cross Susanne Turnbull, Aetna Ernest Valente, Ph.D., Blue Shield of California Michael van Duren, M.D., Sutter Physician Services Jeffrey Walter, Anthem Blue Cross Bundled Payment Steering Committee Bart Asner, M.D. (Chair), Monarch HealthCare Arminé Papouchain, Blue Shield of California Richard Jacobs, Cedars-Sinai Health System Benjamin Katz, Cigna Healthcare of California Ronald Kaufman, M.D., Tenet California Stephanie Mamane, Brown & Toland Medical Group Jennifer Mitzner, Hoag Memorial Hospital David Nace, M.D., McKesson Jeff Rideout, M.D., TriZetto James Robinson, Ph.D., UC Berkeley School of Public Health Samuel Skootsky, M.D., UCLA Health System Martha Smith, Health Net of California Greg Stevens, Aetna Richard Sun, M.D., CalPERS Bundled Payment Technical Committee Jacob Asher, M.D., Cigna Healthcare of California (Chair) Douglas Gin, Aetna Jill Harmatz, Blue Shield of California Douglas Moeller, M.D., McKesson Megan North, CAP Management Services Stanley Padilla, M.D., Brown & Toland Medical Group Virginia Ripslinger, St. Joseph Hospital – Orange Ron Ruckle, Cedars-Sinai Health System Jay Sultan, TriZetto Colleen Thilgen, Ingenix Thomas Wilson, Monterey Peninsula Surgery Centers Division of Financial responsibility (DOFr) Work Group Linda Barney, Sharp HealthCare Elizabeth Campbell, Cedars-Sinai Health System Margo Carroll, Health Net of California Neena Dhillon, Anthem Blue Cross Ellen Fagan, Cigna Healthcare of California Susan Galzerano, UnitedHealthcare Jennifer Hastie, UnitedHealthcare Nancy Hazlewood, Hazlewood Consulting Jennifer Helbock, UnitedHealthcare Deb Henning, Brown & Toland Medical Group Brian Jeffrey, UnitedHealthcare Greg Labow, Receivable Optimization, Inc David Lankford, Blue Shield of California Steve Linesch, MCS/Gemcare Elly Menegus, Aetna Valerie Morse, UnitedHealthcare Cecil Nyein, Anthem Blue Cross Edie Parker, Blue Shield of California Ramona Saragosa, Sharp HealthCare Dave Schinderle, US Bank Janet Von Freymann, Brown & Toland Medical Group Carol Wanke, Sharp HealthCare 11 IHA Affiliate Organizations The IHA Affiliate Program provides the opportunity for non-board organizations to formally engage with IHA and its leadership through strategic networking opportunities, communications and IHA sponsored events. Affiliate Members include health plans, hospitals and health systems, and physician organizations. Affiliate Partners include vendor companies that provide a product, solution, or service to health plans, hospitals and health systems, and physician organizations. 2011 Affiliate Partners Abbott Archimedes Bristol-Myers Squibb The Camden Group CERECONS Davis Wright Tremaine LLP Diversified Data Design (DDD)/TransUnion Intelligent Healthcare Pfizer, Inc. 2011 Affiliate Members Children’s Physicians Medical Group Santa Clara County IPA SCAN Health Plan 12 Torrance Memorial Medical Center UCLA Medical Group IHA Staff Tom Williams, Dr.P.H., President and CEO Pay for Performance Program Dolores Yanagihara, M.P.H., Director, Pay for Performance Program Cathleen Enriquez, M.B.A., Program Manager, Pay for Performance Program – Quality Gail Rusin, M.B.A., Program Manager, Pay for Performance Program – Efficiency Brian Goodness, Data Analyst, Pay for Performance Program Episode Payment Pilot and New Program Development Jett Stansbury, Director, New Program Development Dan Cummins, Program Manager, Episode Payment Program Nancy Hazlewood, Project Manager Office Administration and Communications Cindy Ryan Ernst, Director, Administration & Communications Tom Davies, J.D., M.P.A., Senior Advisor, Affiliate Program Emma Dolan, M.P.H., M.P.P., Policy Analyst Jennifer Kellar, Communications Analyst Eileen DeGrazia, Office Administrator Suzanne Estep, Executive Assistant IHA Headquarters, located in the Kaiser Center on Lake Merritt in Oakland, California About the Integrated Healthcare Association The Integrated Healthcare Association (IHA) is a not-for-profit multi-stakeholder leadership group that promotes quality improvement, accountability and affordability of healthcare in California. IHA administers regional and statewide programs, serves as an incubator for pilot programs and projects, and actively convenes all healthcare parties for cross sector collaboration on healthcare topics. IHA principal projects include the California Pay for Performance Program (the largest private physician incentive program in the U.S.), the measurement and reward of efficiency in healthcare, administrative simplification, healthcare affordability, bundled episode of care payments, and accountable care organizations. Integrated Healthcare Association 300 Lakeside Drive, Suite 1975 Oakland, CA 94612 Office: 510.208.1740 Fax: 510.444.5482 www.iha.org