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
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expensive surgery,
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thensome
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bear no responsibility
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to, though
from, Medicare’s
cost
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have
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implantable
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(ACE)
payment
demonstration
orthopedic
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Emma
Dolan, MPP,
Policy
Analyst
device
to
use
as
part
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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
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but does
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the structure
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patients’such
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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
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caremove towards EOC
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is re-examining
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in episode
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(P4P) Program has developed a measure of Total Cost of Care (TCC) that captures
Published by Integrated Healthcare
payment
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will be expanding
into other
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cian organizations in This
California.
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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
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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
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NEED FOR
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Emma Dolan, MPP,
MPH, Policy
organizations
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episode
initiative,inalbeit
theMPH,
driversDirector,
of Total Cost
of Care
incentive
program
in the
Unitedpayment
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thissomeprogram represents
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Pay for
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www.iha.org
date by
the stakeholders
EOC payment
include:
in moderating the upward
trend
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across diverse
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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
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to bundled
payment imposes
meaningful
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for collecting
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common
measure
set,
and
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cost and quality into
health
plan incentive
paymentsa to
California
physician
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tive costs on participating
provider
organizations
to sharpen
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approximately
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overthreatens
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aims to help
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that organizations
have arisen (PO).
© 2011
disagreements over
division
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created
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Integrated Healthcare Association
due to the overwhelming
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organization.esSome
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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
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for both
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by P4P participants,
however
the quality and cost
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costsOrganizations,
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national movement
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and should
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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
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actual
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for regions
all commercial HMO/
Integrated Healthcare Association
National
ACO
Congress
in
Los
Angeles.
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of the Second
and multiple health
plans.
The Integrated
Association
(IHA)
runs the proPOS
enrollees
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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
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Integrated Healthcare Association
of plans
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lump
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payment
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Child and Family
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the in
Southside
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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