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Improving the Quality of Care to Reduce Health Care Costs and Improve Productivity

Improving the Quality of Care to Reduce Health Care Costs and Improve Productivity. Iowa Health Buyers’ Alliance Annual Conference October 15, 2008 Jim Mortimer j.mortimer@earthlink.net 773-343-8663. Improving the Quality of Care to Reduce Health Care Costs and Improve Productivity.

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Improving the Quality of Care to Reduce Health Care Costs and Improve Productivity

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  1. Improving the Quality of Care to Reduce Health Care Costs and Improve Productivity Iowa Health Buyers’ Alliance Annual Conference October 15, 2008 Jim Mortimer j.mortimer@earthlink.net 773-343-8663

  2. Improving the Quality of Care to Reduce Health Care Costs and Improve Productivity • Estimating the Cost of Poor Quality Health Care • Midwest Business Group on Health 2003 • Intermountain Health Care/RTI AHRQ study 2007 • Better care costs less • Information for Iowa from the Dartmouth Atlas of Health Care • Actions you can take

  3. Cost of Poor Quality What is it? It is an estimate of the total costs of ineffective and inefficient processes and procedures. Juran Institute

  4. Second Printing April 2003

  5. Estimated Cost of Poor Quality Health Care The Annual Cost of Poor Quality Care Per Covered Employee - 2002 $1,500 Direct Health Care Expense 400 Indirect Cost $1,900 Total Cost of Poor Quality MBGH/Juran Report - 2003

  6. Health Care COPQ Categories • Overuse • Underuse • Misuse • Other • Administrative Waste • Delays • Service deficiencies

  7. Example of Overuse: Antibiotics • Problem: Of 110 million prescriptions written for antibiotics, 40% are unnecessary ($17 million for common cold). • There is a growing number of organisms resistant to antibiotics (estimated cost is $5 billion annual national cost to treat)

  8. Example of Underuse:Diabetes Screening 46.7% of adults age 40 and over with diabetes received all three recommended screenings* during 2004 to prevent disease complications Rate has held constant for three years *HbA1c test, eye exam, foot exam AHRQ National Healthcare Quality Report 2007 page 40 http://www.ahrq.gov/qual/qrdr07.htm

  9. Example of Misuse : Medical Errors • Problem: IOM report estimates that 44,000 to 98,000 deaths per year due to inpatient medical errors • In the USA • Half are preventable • Medication errors alone cause 7,000 deaths per year • Errors cost $17 to 29 billion per year (half for direct care costs)

  10. Intermountain Health Care/RTI AHRQ study 2007 122 pages with appendices Very technical Not yet published in peer reviewed journal Cost of Poor Quality or Waste in Integrated Delivery System Settings Final Report Submitted to: Cynthia Palmer, MSc Agency for Healthcare Research and Quality 540 Gaither Road Rockville, Maryland 20850 Submitted by: RTI International 3040 Cornwallis Road P.O. Box 12194 Research Triangle Park, North Carolina 27709 Authored by: Brent James, MD, M.Stat. Intermountain Health Care 36 South State Street, 21st Floor Salt Lake City, Utah 84111-1486 K. Bruce Bayley, PhD Providence Health System 5211 NE Glisan Portland, Oregon 97213 Contract No. 290-00-0018 RTI Project No. 0207897.011

  11. Cost of Poor Quality or Waste inIntegrated Delivery System Settings • Overall findings: • 32% of care should not have been undertaken at all – Overuse • 35% of effort in all care undertaken is “non value-added” • 56% is conservative cost of poor quality care • 32% Overuse + 24% NVA (0.35 x 68%) = 56% • (Does not address misuse, errors and underuse) Email correspondence with Dr. B. James

  12. Better Care • Better care costs more • Better care costs less • It depends…

  13. Eliminate Underuse B The Goal A The Industry Today

  14. Minnesota Association between Medicare spending and quality ranking -- U.S. States Iowa Wisconsin Illinois Baicker and Chandra, Health Affairs, web exclusives W4-184, 7 April, 2004

  15. Dartmouth Atlas of Health Care2008www.dartmouthatlas.org

  16. Atlas Categories of Services • Effective care: Evidence-based services that all patients should receive. No tradeoffs involved.Acute revascularization for AMI • Preference-sensitive care:Treatment choices that entail tradeoffs among risks and benefits. Patients’ values and preferences should determine treatment choice.CABG for stable angina • Supply-sensitive services: Services where utilization is strongly associated with local supply of health care resourcesfrequency of MD visits, specialist consultations use of hospital or ICU as a site of care Wennberg, Skinner and Fisher, Geography and the Debate over Medicare ReformHealth Affairs, web exclusives, February13, 2002

  17. Dartmouth Atlas Websitewww.dartmouthatlas.org

  18. Total Medicare Reimbursements per Enrollee (Part A and B) (2005)Midwestern Hospital Referral Region Rates (HRRs)

  19. Chicago HRR Inpatient CareMedical and Surgical - 2005

  20. Des Moines HRR Inpatient CareMedical and Surgical - 2005

  21. Des Moines and ChicagoSide by Side

  22. Studies comparing regional differences in spending and the content, quality, and outcomes of care

  23. 35,000 35,000 30,000 30,000 25,000 25,000 Inpatient reimbursements per decedent Inpatient reimbursements per decedent 20,000 20,000 15,000 15,000 R2 = 0.59 R2 = 0.07 10,000 10,000 5.0 10.0 15.0 20.0 25.0 30.0 700 900 1,100 1,300 1,500 1,700 Hospital days per decedent Reimbursements per patient day Relationships between inpatient reimbursements, volume, and price of care among chronically ill patients during the last two years of life (2001-05)

  24. “…the amount of care given to patients early in the two-year period preceding death was highly correlated with the care intensity during the last six months of life for each individual hospital.” 2008 Atlas Executive Summary – page 11 Persistent Intensity Patterns

  25. Dartmouth Atlas Hospital Specific Data • Medicare enrollees who died with two or more admissions to the same hospital in a two year period (2001-2005) • Enrollees with one or more of the following nine chronic conditions: • Congestive Heart Failure, Chronic Lung Disease, Cancer, Coronary Artery Disease, Renal Failure, Peripheral Vascular Disease, Diabetes, Liver Disease, Dementia

  26. Hospital Care Intensity Index The HCI is based on two variables: the number of days patients spent in the hospital and the number of physician encounters (visits) they experienced as inpatients. It is computed as the age-sex-race-illness standardized ratio of patient days and visits. For each variable, the ratio of a given hospital’s utilization rate to the national average was calculated, and these two ratios were averaged to create the index. States, regions, and hospitals with high scores on this index used inpatient care much more than those with low scores. The HCI for regions and hospitals was converted into a percentile score calculated according to where that region or hospital fell in the ranking of all regions and hospitals for which we had an index estimate. We have calculated the percentile ranking so that approximately 1% of the hospitals in the database fall into each percentile. Page 110 of 2008 Atlas Report Hospital Care Intensity IndexIowa Hospital Referral Regions (HRRs)

  27. Hospital Care Intensity Index Des Moines HRR

  28. Dartmouth Atlas of Health Care Iowa Area Hospital Care Intensity Report For Iowa Health Buyers Alliance October 15, 2008

  29. Iowa Area Hospital Care Intensity Report Performance Measure Categories: • Spending • Intensity and Utilization • Capacity • Quality 53 hospitals measured in the report

  30. Iowa Area Hospital Care Intensity Report Five Regions: • Des Moines and Central • Sioux City and Northwest • Iowa City and Northeast • Quad Cities and Southeast • Omaha/Council Bluffs and Southwest

  31. Iowa Area Hospital Care Intensity Report Data in Four Sections: • State Area Rankings • Regional Rankings • Sample Hospital Profiles • Consumer Reports Website Atlas information

  32. Section 1 State Area Ranks

  33. Section 3 Hospital Profile Performance compared to national percentiles of all hospitals

  34. Section 3 Hospital Profile Performance compared to national percentiles of all hospitals

  35. Section 3 Hospital Profile Performance compared to national percentiles of all hospitals

  36. Section 3 Hospital Profile Performance compared to national percentiles of all hospitals

  37. Section 3 Hospital Profile Performance compared to national percentiles of all hospitals

  38. Making Hospital Intensity Data Useful for Patients and Consumers • 2008 Dartmouth Atlas Chapter 4:Los Angeles, CA case studywww.dartmouthatlas.org • Consumer Reports – July 2008“Too Much Treatment?” article and Website: www.consumerreports.org/health/doctors-and-hospitals/hospital-home.htm

  39. Long Beach, CA2008 Dartmouth Atlas – Chapter 4

  40. Medicare spending, resource inputs, and care intensity among hospitals in Long Beach, CA

  41. Consumer ReportsCompare Hospitals for Chronic Care pagewww.consumerreports.org/health/doctors-and-hospitals/hospital-home.htm

  42. Consumer Reports Compare Hospitals for Chronic Care pagewww.consumerreports.org/health/doctors-and-hospitals/hospital-home.htm

  43. Actions you should take • Compile your data • Claims data from your carriers on cost and quality problem drivers. Estimate cost of poor quality • Dartmouth Atlas www.dartmouthatlas.org • AHRQ NHQR and State Snapshots http://statesnapshots.ahrq.gov • Commonwealth Fund State Scorecard data www.cmwf.org • Health Plans HEDIS measures • Local Coalition information –IHBA and HPCI • NBCH “eValue8” health plan performance survey www.nbch.org

  44. Actions you should take • Work with coalitions, carriers and consultants to identify interventions that should have positive ROI for identified problems • Publish data for use and education of employees and the public • Work with carrier/health plan to pioneer payment incentives for providers and benefit incentives for covered populations • Educate employees and the public to avoid errors and to self-manage chronic conditions • Join with other public and private employers to share problems identified in your/their data/experience and the work of implementing interventions at the community level.

  45. The New York Times 6/14/07Reed Abelson “In Health Care, Cost Isn’t Proof of High Quality” • Pennsylvania Health Care Cost Containment Council Report: “Cardiac Surgery in Pennsylvania 2005” www.pch4.org • Heart bypass surgery payments to hospitals vary between $20,000 and $100,000 • Comparable length of stay and mortality rates for high and low-paid hospitals • Two of highest paid hospitals had higher than expected death rates. • One of the best performing hospitals was paid an average of $33,549: less than half of the $80,000 average for the 60 hospitals studied • “Certain payers are paying an awful lot for poor quality” Marc Volavka, Executive Director, Pennsylvania Health Care Cost Containment Council

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