Payment Models for Shared
Decision Making: Systematic
Review and Recommendations
1
Douglas Conrad, Professor of Health Services
University of Washington
Department of Health Services
&
Phillip Haas
Network Market Head – Northwest Market
Aetna Life Insurance Company
May 26, 2011
Purpose of This Session
2
 To evaluate the rationale for financial incentives in
support of shared decision-making (SDM) and use of
patient decision aids (DAs)
- based in relevant theory and empirical evidence
 To position the financial incentives for SDM and use
of DAs within the larger context of fundamental
payment reform in health services
 To craft recommendations for payment models that
support SDM and DAs without generating adverse,
unintended consequences
Rationale for Financial Incentives in Support
of SDM and Use of DAs
3
 Formal systematic evidence review based on 55
randomized controlled trials (O’Connor et al. 2009)
concludes that patients involved in SDM are:



Relatively better informed
Less likely to be undecided about course of treatment
More likely than their doctors to defer or decline surgery
- with no measurable adverse effect on health outcome or
satisfaction
(Marshall 2011)
 Potential exists to reduce healthcare costs, but little
evidence to date
Rationale for SDM/DA Financial Incentives
(continued)
4
 Promoting SDM/DA is consistent with improving “value”


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Enhanced appropriateness of treatment choices
Improved clinical quality through better concordance of treatment
choices with patient preferences and values
Potentially reduced use of expensive, invasive procedures
 Major barriers to SDM/DA implementation are:
(Legare et al. 2008)

Time constraints:



Proper SDM/DA incentives might mitigate this factor
Lack of applicability due to patient attributes
Clinical contingencies and situation
Rationale for SDM/DA Financial Incentives
(continued)
5
 Principal facilitators of SDM/DA use are:
(Legare et al. 2008)
Provider motivation
 Flowing SDM and use of DAs to positively impact the clinical
process
 Improving patient outcomes
Properly designed SDM/DA financial incentives (direct and
indirect) could positively influence provider motivation and
patient outcomes

Positioning SDM/DA Financial Incentives
6
Larger Context of Health Care Payment Reform:
 Moving beyond FFS:


Some add-on FFS codes for SDM/DA use may be appropriate as a
transitional strategy (recognizing potentially increased length of
consultation)
5-year window seems likely for CMS experimentation with different
payment models (MedPAC 2010; PPACA)
Bundled payment for episodes of care (with a possible “warranty”)
 Comprehensive pmpm payment for care (e.g., global or professional
capitation)
 Risk-adjustment is a requisite for fairness & efficiency


“Value-based” payment and purchasing models are most promising

Payment for “results”, not activity
Positioning SDM/DA Financial Incentives
(continued)
7
 Need for a next generation of more robust provider
pay-for-performance (P4P) programs


Learn from the existing evidence regarding optimal structure
and power of incentives
Look for fundamental, embedded change rather than
incremental adjustments at the margin
Positioning SDM/DA Financial Incentives
(continued)
8
Incentive power should be greater with:
(1) Optimal size (getting to the ‘sweet spot”)
(2) Provider controllability (greater with process
indicators)
(3) Absolute (rather than relative) performance
standards
(4) Downside risk (penalties and/or withholds), in
addition to rewards: tap “loss aversion”
Positioning SDM/DA Financial Incentives
(continued)
9
Incentive power should be greater with:
(5) Involvement of stakeholders and clinical professionals
(for credibility and sustainability)
(6) Individual-level focus, as compared to group level
Caveats:

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Health care, and especially shared decision-making, is a “team sport”
Group-level incentives are important for supporting clinical
infrastructure, as well as the culture of the practice and the care team
(Conrad and Perry 2009)
Positioning SDM/DA Financial Incentives
(continued)
10
 SDM/DA incentives are best when integrated within
the care of the patient over time:


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SDM/DA reflects a stronger commitment to the “coproduction” of health ( Salzburg Global Seminar 2011)
SDM … “is a concrete manifestation of a more substantial
social process – the re-conceptualization of the roles and
responsibilities of patients and health professionals in
improving health.” (Marshall 2011)
In that spirit, incentives could also further embed SDM/DA
within the informed consent process

Note the WA state law which offers statutory encouragement, but
not financial incentive per se for SDM/DA use
Positioning SDM/DA Financial Incentives
(continued)
11
 PPACA has two particularly relevant provisions for
SDM/DA use:
Section 3506 establishes priority of setting quality standards
for certifying DAs (National Quality Forum likely would play
this role.)
1)
o
Funds authorized, but not yet appropriated
Section 3021 establishes the CMS enter for Medicare and
Medicaid Innovation
2)
o
Funds authorized and appropriated ($5 million in 2010; $10
million per year in 2011-2019)
Positioning SDM/DA Financial Incentives
(continued)
12
 MedPAC (2010) has highlighted the potential role of
financial incentives and payment reform for
enhanced use of SDM/DAs
The move toward accountable care organizations (ACOs) has
potential to tie SDM/DA use as a clinical accountability
criterion within payment arrangements for preferencesensitive conditions
FFS “add-on” codes for lengthened visits can be used when ≥
½ the visit is for counseling: documentation is required and
must include a time estimate, specific clinical condition, and
nature of what was discussed
1)
2)

Used mostly by surgeons, oncologists, nephrologists, and other
specialists
Positioning SDM/DA Financial Incentives
(continued)
13
 More MedPAC highlights

Requirement for documented use of SDM/DA for participation in
recognition or incentive programs:


For example, BCBS stipulates SDM/DA use by facilities seeking “Blue
Distinction” for spinal surgery and hip or knee replacement surgery
Consideration of requirement (Schoen 2007) that providers of some
Medicare FFS-reimbursed services (coronary revascularization for
angina or lumbar spine surgery for low back pain):
Provider would be held accountable for patient compliance
 Failure to perform SDM/DA would trigger 10% payment reduction
 CMS would have to define criteria for decision aid quality


Massachusetts Alternative Quality Contract is a Potentially
Promising Incentive Structure: Performance-based Payment
Increases over Time (Chernew et al. 2011)
Positioning SDM/DA Financial Incentives
(continued)
14
Reflections on Incentives for SDM/DA Use from WA
State Demonstration:
 Conducted key informant interviews with health plan
leaders and one major public purchaser and also
interviewed the project managers at all three WA
SDM/DA participating demonstration sites
 Addressed not only payment and financial incentives
for SDM/DA use, but also:


Specific strategies and steps for increasing patient engagement
Distribution and pricing of DAs
Positioning SDM/DA Financial Incentives
(continued)
15
 Additional Findings from key informant interviews:
 DAs are generally being distributed free to patients on the web,
as part of a visit, or mailed (contract negotiations with
vendors)
 Payers will look for value improvements in care and results to
sustain the financial feasibility of SDM/DA use
 Some questioning of a vendor “1-800 coach” approach
 Integrating SDM/DA within a prepaid group practice,
capitation payment model, coupled with salaried physician
compensation, is a particularly favorable approach and
economic environment for facilitating SDM/DA use and
avoiding certain economic disincentives (e.g., potential loss of
FFS income from remunerative procedures)
Positioning SDM/DA Financial Incentives
(continued)
16
 Payment Models in Use within Payers & Purchasers &
Relevance for SDM/DA Use
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Plans are not directly paying FFS for DA codes or SDM in care
processes at this time
Plans and self-insured employer-purchasers lean toward paying for
outcomes, not activity
Organized purchasers see their role as enablers of enrollees, using
such tools as:
1)
2)
3)
4)
Web-based information bases that enhance health literacy and
knowledge of treatment options for specific clinical conditions
Tools that promote transparent price comparisons for most common
procedures and defined episodes of care
Narrowed provider networks that use tiered cost-sharing to incent
choice of relatively efficient and high quality providers
Value-based insurance design to incent choice of more cost-effective
and evidence-based health services
Positioning SDM/DA Financial Incentives
(continued)
17
 Health Plans and Purchasers are crafting a variety of
complementary and facilitating approaches to
patient engagement that do not pay for SDM and DA
use explicitly, but that support the conditions for
robust shared decision-making by members
 Such tools include:


Built-in web-based calculators for costing out alternative
treatment scenarios (i.e., supporting “what-if” analyses
Use of member, claims, pharmacy, and health risk assessment
data to stratify enrollees into subgroups of “readiness to
engage” or to identify systematic gaps in care
Recommendations for Payment Models &
Incentives to Support SDM and DA Use
18
 Development of ACOs offers solid opportunity to transform
payment into risk-adjusted capitation models
 Virtual ACOs must offer stronger informational and infrastructure
supports and experiment with individual incentives to motivate
SDM & DA use equivalent to that achievable within vertically
integrated ACOs
 Transitional forms include bundled payment per episode of care –
with warranties of improved outcome and/or limited payment for
avoidable complications:
Example of “evidence-informed case rates”
Prometheus Payment (DeBrantes & Rastogi 2008)
 Shared savings incentives offer a more global incentive, but need
downside risk for motivation

Avoid what Berenson (2011) refers to as the “bridge to nowhere”
Payment Model Recommendations
for SDM & DA Use
19
 Avoid overpayment in any payment schema:

Concern is crowding out intrinsic motivation by trying to
extrinsically incent behavior that inherently demands internalization
and re-socialization of a new process of decision-making
 Emphasize payment incentives that are “aligned with”
shared decision making processes that are being
encouraged, rather than using high-powered payment
schemes that implicitly “force” the behavior being sought
 Use complementary patient financial incentives (valuebased cost-sharing and plan designs) that encourage
shared-decision-making
Insurer Perspective on SDM/DA
20
 Insurers share the vision for improving the effectiveness and
efficiency of care but are exploring other pathways that involve
working separately with patients and providers in a broader
context:


Aetna’s ACO provider strategy focuses on providing tools for clinical
decision support (Active Health Management) and health
information exchange (Medicity) that can help providers manage
population health by finding targeted patients and engaging them at
the ACO/system, physician, and member levels to support their own
care and wellness.
Aetna’s consumer strategy is to provide tiered networks and website
applications that enable members to compare alternative treatments
and to select the most effective/efficient providers (Aexcel, Choose &
Save, and member payment estimator with physician and procedure
price transparency). We are moving these from desktop/laptop to
mobile phone platforms.
Insurer Perspective on SDM/DA
21
 Insurers are beginning to apply new reimbursement methods
as we begin to move from fee-for-service (with or without
adding codes for SDM/DA use) toward bundled payments for
episodes of care and ultimately capitation.


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In this market we have had good experience collaborating with
multispecialty groups using scorecards as the basis for future
reimbursement increases by rewarding the achievement of specified
targets such as systematic reporting of laboratory results, improving
responses to system-generated care considerations, increasing use of
electronic precertification, and increasing generic prescribing and
formulary compliance.
We offer similar rewards to hospitals – e.g. “warranties” for
readmissions within specified time periods of up to 30 days.
We could add SDM/DAs to these scorecards.