"Quality-based Purchasing in Public and Private Employer Health Insurance Programs"

1. "Quality-based Purchasing in Public and Private Employer Health Insurance Programs" Health Plan Quality Transparency Efforts Washington State Conference on Quality-Based Health Care Purchasing December 4-5, 2006 Seattle, Washington Mark C. Rattray, MD President CareVariance

2. Health plan quality transparency motivators • Purchasers • Differentiation in the marketplace • Accrediting bodies (NCQA) • Presidential transparency mandate • Consumer Directed Health Plans

3. Health plan quality data collection methods • Internal claims-based algorithms • Limited augmentation by external data feeds – lab results, pharmacy, mental health • Physician or physician group self-reported data • External certifying or recognizing entities • Mix of the above

4. Internal claims-based algorithms Like HEDIS, a numerator/denominator approach: • Numerator: number of patients where compliant care was rendered • Denominator: number of patient candidates for recommended care • Generates raw and sometimes weighted, risk adjusted compliance rates

5. Specialty Quality Measures • Specialties are creating quality measures through AQA, Physician Consortium for Performance Improvement – often rely on review of clinical record • Some quality measure vendors and plans have created procedural claims-based quality indicators through expert panels / specialist advisory boards / existing specialty guidelines

6. Vendor / plan specialty measures example q. Orthopedic (total joint, disorders of upper and lower extremities, spine) • Total cases: This is listed on the right most column of the scorecard and reflects the total number of physician cases for a procedure category. The scorecard measures only complete episodes of care and uses claims data for 2002-2003, where patients have enrollment with UnitedHealthcare for a minimum of 180 days prior and 400 days post procedure. • % of Total physician cases: This is listed on the left most column of the scorecard and is the number of UnitedHealthcare cases the physician has performed of a particular procedure type divided by the total number of UnitedHealthcare cases for that physician. • Procedure less than 30 days: Measures the % of a physician’s UnitedHealthcare patients who receive a surgical procedure fewer than 30 days after the initial diagnosis is made. This diagnosis does not have to be originally made by the treating surgeon. • Pre-Surgery injection or physical therapy (PT) rate: Measures the % of a physician’s UnitedHealthcare patients who have had at least one PT session OR injection within 1-180 days prior to a surgical procedure. (excerpt from UnitedHealth PremiumSM Program Methodology, June 2005)

7. Physician or physician group self-reported data • Used by IHA in California • IPA’s paying their own claims (capitated) and or groups with robust EHR / registries • Used as backup method to claims data • Physicians may augment claims data • Plans must report at individual patient / indicator basis and allow augmentation • Medical record based indicators require this • Employers may be reluctant unless audit processes in place

8. External certifying or recognizing entities • Board Certification historically used as quality indicator • Maintenance of Certification programs increasingly are requiring compliance self-assessment • NCQA Practice Recognition Programs • Health plans may display certification / recognition in directories • Plans may give “extra credit” in internal programs

9. Public transparency of plan measurement From www.unitedhealthcare.com

10. Employer / plan challenges • Speed to (often national) market of quality and episodic cost measures • Specialty measurement • Desire for “High Performing Networks” • “Performance Differentiated Network” – all providers included, differentiated by performance and resulting employee benefits • “Narrowed Network” – subset of existing network comprised of “higher performing” providers

11. Employer / plan challenges, cont. • Plan / employer intermediaries limiting direct, open, fully informed dialogue • Potential dominance of sales/marketing in development and deployment of high performance networks • Inadequate investment (money and time) in stakeholder preparation • Lack of “line of sight” benefit alignment for each stakeholder group

12. Thank you! www.carevariance.com