State Coverage Initiatives

1. State Coverage Initiatives Value Based Purchasing and Consumer Engagement Strategies in Public Employee Health Plans May 13, 2010 Online Webinar

2. If you can’t hear the webinar: • Call the following toll-free number: • 866-699-3239 • When prompted enter the following event code: • 790 727 346 • Enter your attendee ID number. This can be found on the info tab at the top of the screen. • If you cannot locate your attendee ID number you can still join the audio portion of the webinar by hitting the # sign.

3. If you don’t have the presentation: • You can download the presentation for this webinar at the following url: • http://www.statecoverage.org/node/2335 (you will see the link in the brown box at the left of the screen)

4. Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide Presented by Michael Bailit and Joshua Slen for AcademyHealth May 13, 2010 Presented by Michael Bailit For the State of Department of Health Care

5. Definitions Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide • Value Based Purchasing (VBP) a strategy employed by purchasers of health care insurance and health care services to maximize the benefits received at the lowest cost • Consumer Engagement (CE) a group of strategies to effect changes in employee, retiree and dependent behavior 5

6. Value-Based Purchasing: The Process Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 6

7. The Massachusetts Group Insurance Commission (GIC) in its RFP for Pharmacy Benefit Manager (PBM) services first communicated a clear set of priority performance goals, and then set forth clear and measurable performance requirements. Requirement 12. Academic Detailing. The selected PBM must have targeted academic detailing programs that can be focused on the GIC Top Prescribing Clinicians. Step One: Specify What You Want to Buy Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 7

8. Oregon monitors the performance of its health plans by using a dashboard to review, among other things, Breast Cancer, Cervical Cancer, Colon Cancer, and PSA Screening. Oregon also tracks HEDIS measures for the cancer screenings identified above and compares health plan performance against the national 75th and 90th percentiles. Step Two: Measure if You’re Getting It Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 8

9. In South Carolina the evidence-based claims monitoring program provides treatment recommendations directly to physicians using best practice guidelines. The “Care Considerations” generated represent opportunities for improvement identified through a rigorous data-driven process. Step Three: Identify Opportunities for Improvement Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 9

10. Accelerate contractor performance improvement efforts in areas of high priority to the purchaser. This should be done through the annual establishment of a group of performance improvement goals with the contractor, all with complementary, concrete measures. Step Four: Set Improvement Goals Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 10

11. It is a shared objective of the purchaser and contractor that the contractor perform well and achieve purchaser-desired levels of performance improvement. The purchaser can enhance the likelihood of contractor success through collaborative activity with one contractor, or several contractors together. Step Five: Collaborate to Improve Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 11

12. In Oregon the Quarterly Experience Report includes measures for Cholesterol Screening and Preventive Care Visits. The state seeks to observe improvement over time. Step Six: Remeasure Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 12

13. Minnesota’s Bridges to Excellence (BTE) program is an employer-led P4P initiative for physicians. Minnesota’s program uses locally developed measures to reward physicians for optimal care in the treatment of diabetes and heart disease. Step Seven: Apply Incentives and/or Disincentives Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 13

14. State purchasers should focus on the cycle itself and the need to perform and connect the steps. Value-based Purchasing: Seven (7) Steps Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 14

15. Consumer Engagement: Three Areas Strong Leadership Consumer Engagement Financial & Non-financial Incentives Support Services Name of Presentation Here Value-Based Purchasing and Consumer Engagement: Process-Driven Improvement 15

16. Financial incentives can take a number of different forms. Most common are modest payments or rewards (e.g., $25 gift card) for enrolling in or completing a wellness program, such as a yoga class. Increasingly of interest are financial incentives that are integrated into the payer’s plan design. Financial and Non-Financial Incentives Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 16

17. Minnesota has obtained a 70% completion rate using its enrollee self-reported Health Risk Assessment (HRA) instrument. As an incentive for HRA completion, the state offers a $5 discount on office visit co-payments for both the employee and dependents. Financial and Non-Financial Incentives Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 17

18. Of increasing interest is offering adjustments in premium contributions if specific wellness behaviors are followed, such as participating in a disease management program or completing a personal HRA. Financial and Non-Financial Incentives Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 18

19. Alabama has a body mass index (BMI) screening as part of the HRA utilized at worksite locations and at public health clinics. If the employee is found not to have any risk factors, he or she receives a premium discount of $25 per month. The completion rate through November 2009, during the first calendar year of the program, exceeded 95%. Financial and Non-Financial Incentives Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 19

20. Support programs, often disease management and wellness programs, provide the guidance and encouragement by health coaches that many people need to make and sustain difficult behavioral changes Support Services Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 20

21. West Virginia offers a diabetes program targeted at the plan’s 13,000 diabetic enrollees. The diabetes program offers appointments with pharmacists throughout the state. Enrollees receive free diabetic drugs and supplies, but must meet with their participating pharmacist a minimum of once per month and must establish and maintain two goals, such as exercising or eating. Support Services Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 21

22. Leadership Consumer engagement initiatives cannot be viewed as a side project, but as a strategy that is basic to the direction of the organization. In Oregon, the Governor launched a Wellness Initiative in October 2008 that involves the placement of “Stay Well Coordinators” in 34 different state agencies. Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 22

23. Leadership Oregon followed-up on this leadership initiative with: agency checklists a diverse and comprehensive slate of activities organized into four categories; activities with public health activities with other employers activities with health plans activities with members ongoing activities that tie together disparate activities (e.g., 2009 HRA completions tied to food drive donations by health plans) Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide

24. Consumer Engagement: Three Areas Leadership, use of financial and non-financial incentives, and integrated support services are all necessary aspects of a successful consumer engagement strategy. Providing Strong Leadership Consumer Engagement Providing Financial and Non-financial Incentives Providing Support Services Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide

25. Summary Observations For states to maximize value they have to focus on the delivery system and the health behaviors of the population. State purchasers are often engaged in one area or the other, but rarely equally in both. Efforts have to be built with a twin focus on health care market dynamics and the cultural underpinnings of society that drive health behaviors. Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 25

26. Summary Observations continued… To be successful, state purchasers must follow a defined series of process steps in a consistent fashion and must measure success. Adherence to structured process that is data- driven will serve states well as they choose among new programs to adopt and existing programs to change or discontinue. Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 26

27. Summary Observations continued… Trends are towards; a focus on prevention and management of chronic diseases that increasingly involves the practice directly (e.g., medical homes) integration of consumer engagement strategies into plan design (e.g., premium discounts for completing HRAs) the purchase of services and the design of strategies based on data-driven outcome measurement The future holds the promise of better integrated health systems and public payers have the opportunity to play a significant role. Name of Presentation Here Value-Based Purchasing and Consumer Engagement in State Employee Health Plans: A Purchaser Guide 27

28. Webinar: State Coverage Initiative Programs Academy Health A Massachusetts Hat Trick? Access, Quality, Cost - May 13, 2010

29. The Big Picture - Access Access – • Ch. 58 of the Acts of 2006 – enacted in April – up and running on October 1 • Created a Connector Authority (Exchange), • Individual mandate • Employer mandate • Two basic programs – one subsidized, one not • Defined minimal creditable coverage • Wildly successful – • 97% of Mass. Citizens are insured today.

30. The Big Picture - Quality Quality - • Quality and Cost Council created • Consumer website created showing hospital rates and quality measures • GIC tiers physicians on quality and cost • BC/BS initiates alternative contract option with accountable provider groups

31. The Big Picture - Cost Cost – • Division of Insurance rejects rate requests for small businesses • Governor Patrick orders hearings to justify rate increases over medical CPI • Governor Patrick instructs Division of Health Care Finance and Policy to review provider contacts • Attorney General reports on hospital prices showing that market clout, not quality, rules the roost • GIC offers lower cost limited network choices – high cost providers excluded • Payment reform Commission recommends end to fee for service

32. Why the CPI Initiative? • The rising cost of health care is unsustainable. The GIC itself spends over $1 Billion a year on health care! • Variation in practice patterns and care in the United States has been well documented in countless studies. • Expert opinion suggests that the best way to save money while improving the quality of care is to focus reform efforts on the delivery system itself. • Transparency+ consequences (such as public reporting and tiering) have been shown to drive improvements in performance. • Specialistsaccount for most of the spending – focus there first

33. History of the GIC’s Clinical Performance Improvement (CPI) Initiative Launched in the summer of 2003, the GIC’s CPI initiative was designed to: • Control cost increases for employees and the Commonwealth • Maintain a comprehensive level of benefits • Maintain participants’ choice of providers • Improve healthcare quality and safety • Inform enrollees about provider performance measures of efficiency, affordability and quality • Encourage members to maintain good health practices

34. Key Dates in the CPI Initiative • First database and efficiency analysis • Spring 2004 through 2005 • RHI’s first quality analysis • Fall 2005 • 2 tiered model for active employee plans • Summer 2006 – 1st Generation Tiered Products Released • 3 tiered model for active employee plans • Spring/Summer 2008 – 2nd Generation Released • Premier data aggregation firm (ViPS) chosen to develop database • Summer 2009 • Probability analysis to enrich quality scoring • Fall 2009

35. How Does the CPI Initiative Work? • Develop a Database of book-of-business health claims • Physicians in tiered specialties receive a Quality and an Efficiency Score • All 6 Health Plans receive physician scores and then tier physicians • Recommended Distribution: 20% Tier 1, 65% Tier 2, 15% Tier 3 Variation allowed to match data clusters • Patient co-pays based on provider tier – Ranging from $15 to $45 • Goals: • To Provide Information to Patient at Point of Purchase • To inform physicians as to their relative performance

36. Annual Database Development Process Tufts Data Master Provider ID Defined Validation of Claims Standardized Definitions Harvard Pilgrim Data Approximately 142 million claims sent to ViPS UniCare Data ViPS HNE Data Fallon Data Neighborhood Data

37. Master Provider File • Approximately 15,000 physicians are linked and have specialties defined • Requires extensive review and cross checking by vendors and plans Providers culled from plan data submissions ViPS links providers across plans Health plans review and edit this list Master provider file used in analysis

38. Quality Methodology Process Overview • Resolution Health Inc. (RHI) uses claims-basedprocessmeasures to evaluate the quality of care provided by a physician. • The RHI measures are derived from nationally recognized organizations (such as NQF), specialty societies (such as ACC and AHA) or the peer-reviewed medical literature. They are essentially rules of best practice that can be measured using claims data. • Analyses are done to identify whether an opportunity for appropriate care presents itself, and whether that care was actually provided. • As of 2009 added a probability model developed by a Johns Hopkins biostatistician to enhance the reliability of the quality score by taking into account: • Patient Behavior • Measure Difficulty • Physician Impact

39. Year 1: Level of Tiering by Plan FY’07 Green indicates ‘individual’ level tiering; Red indicates ‘group’ level tiering >>> *THP tiered surgical specialties based on their hospital tiering results. NHP built a selective network of clinical group practices for one year only.

40. Year 2: Level of Tiering by Plan FY’08 More specialties were tiered in FY’08 with an increasing number tiered at the individual level

41. Year 3: Level of Tiering by Plan FY’09 All GIC health plans have committed to tiering the six core specialties that account for 54% of expenditure. * Indicates the six specialties that were core in FY09

42. Year 4: Level of Tiering by Plan FY’10 All GIC health plans have committed to tiering the eight core specialties that account for 66% of expenditure.

43. Lessons Learned • Timetable is critical • Standardization trumps plan flexibility • Opportunity for physician review is imperative • Expect physician opposition, it will come! • Don’t wimp out

44. West Virginia Public Employees Insurance Agency’s Evolving Consumer Engagement Model Presented to Academy Health By Nidia Henderson Health Promotions Director, PEIA

45. Rationale Raising awareness regarding health risk factors is insufficient Financial incentives get attention Financial incentives combined with interventions are most effective Life expectancy Quality of life Cost effectiveness?

46. Evolving use of incentives Began in year 2000 with tobacco free premium discount combined with cessation program Year 2004 began Face to Face Diabetes Program based upon the Asheville NC project Waives copays for diabetic drugs and supplies if member participates with specially trained pharmacists

47. Diabetes Face to Face West Virginia now has one of the highest incidence of diabetes at 11% Based upon the Asheville, North Carolina model Pharmacists as physician extenders Diabetic drugs and lab copayments waived if member is compliant with plan of care Good process and clinical outcomes, negligible change in claims costs, but May improve quality of life and increase life expectancy

48. F2F Clinical MeasuresA comparison of F2F participants with NCQA Standard # 48January 2008

49. Diabetes program costs # 49January 2008

50. Improve Your Score Began in April 2008 Provides cash rebates Uses stop light system Green/healthy Yellow/moderate risk Red/high risk Stop the 2 pd per year “creep”