2017 Northwest Regional AMGA Meeting: Total Cost of Care. May 12, 2017

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1 2017 Northwest Regional AMGA Meeting: Total Cost of Care May 12, 2017

2 Overview Overview of organizations What we do How does this approach support MACRA and other types of payment reform? Questions? 2

3 Q Corp Independent, nonprofit organization, neutral, multistakeholder collaboration Dedicated to improving the quality and affordability of health care in Oregon Celebrated our 16 th anniversary Mission To improve the quality and affordability of health care in Oregon by leading community collaborations and producing unbiased information Content Experts & QI Professional s Hospitals Health Plans Policymakers Oregon Health Care Quality Corporation Consumers Employers Delivery System Executives & Managers Providers 3

4 Role of Regional Data Collaboratives Patient Education & Engagement Performance Measures Payment & Delivery System Reform Delivery of Care Training & Assistance In Performance Improvement Provider/ Organizational Coordination 4

5 Regional collaboratives: The Innovation Infrastructure Setting a community vision for community benefit Trusted, neutral conveners Experts in data use and impact Knowledge of local challenges and opportunities Consumer and community engagement Helping stakeholders improve Scalable innovations from and for practitioners Regional partners to implement change 5

6 Role of National Network of Collaboratives Regional Healthcare Improvement Collaboratives [RHICs] represent the best avenue to scale important improvements in healthcare. As a neutral party, Collaboratives can bring multiple stakeholders to the table and develop solutions that reflect and value a multitude of interests. Access to National policy updates & priorities Connection to other state & regional leaders 35 members and counting -Mylia Christensen, Executive Director 6

7 Regional Health Improvement Collaboration to support MACRA and APMs Neutral convener, facilitation and consensus Data analytics to test and evaluate APMs Technical assistance to explore issues and develop improvement plans Better together individual plans, payers and health systems can not capture the data or results alone Robust, standardized quality, utilization and cost data don t compete for data, compete on the results! It s better for patients, too! 7

8 Q Corp Voluntary Claims Data Collaborative: 2006-present Data Collaborative major health plans, State of Oregon Medicaid and CMS QE Medicare data 3.5 million unique Oregonians captured in claims 600+ million medical and pharmacy claims records All providers in the directory are eligible to receive quality reports with patient-level information for follow-up 8

9 Q Corp Claims Data Summary 80% Fully Insured 35% Self Insured Commercial Commercial population population 100% Medicaid population 92% Medicare FFS and MA, CMS QE 9

10 Produce Neutral Information Report quality, utilization and cost metrics to providers, health plans and the public Pioneering analytics and reporting to help providers and health systems improve cost of care Created and operate the most validated and utilized claims database in the state Custom reporting to stakeholders working on alternative payment models and quality improvement 10

11 Report Quality Performance to Providers Quarterly reporting on Clinic and Provider performance on over 50 quality and utilization measures. 11

12 Payment Reform Uses Evolution Early pioneering of quality measures and public reporting Education about opportunities for quality improvement Pay for performance contracting, multi payer collaborative efforts around primary care Q Corp data used to evaluate quality and utilization Major transformation in State Medicaid programing - PCPCH and use of Q Corp measures Oregon Exchange measures Coordinated Care Measure Validation Continued use in contracting and P4P, TCOC introduced, community planning around CPC+ and MACRA 12

13 Background: Total Cost of Care Q Corp s Total Cost of Care work is led by the 19 member, multi-stakeholder Cost of Care Steering Committee 13

14 What is Total Cost of Care? 14

15 HealthPartners Total Cost of Care Overview Total Cost Overall cost effectiveness of managing patient health Resource Use Measures the frequency and intensity of services used Price Affected by fee schedules, referral patterns and place of service Population-based measure of average per capita costs (or resources used) for a panel of patients. Costs are adjusted for risk and compared to a benchmark. Includes all services delivered professional, inpatient, outpatient and pharmacy and all payments made by insurer and patient (all allowed amounts). Measures endorsed by the National Quality Forum in

16 Standardized and Adjusted For Risk Costs per member per month (PMPM) are adjusted to account for patient characteristics. Patients are grouped based on diagnoses, age and gender using Johns Hopkins Adjusted Clinical Groups (ACG) risk adjusters One ACG per person per time period 92 different ACGs active at a given time. Each ACG includes individuals with a similar pattern of morbidity Unit of analysis is patient and not visit or service Person-focused: captures longitudinal, multi-episode dimension of care Exclusions: Costs over $100k per patient for one year measurement period Patients under the age of 1 or over the age of 65 16

17 HealthPartners Total Cost of Care Total Cost Index (TCI) Total Cost Numerator Total PMPM = (Total Medical Cost/Medical Member Months) + (Total Pharmacy Cost/Pharmacy Member Months) Denominator Risk Score Rate Calculation Risk Adjusted PMPM = Total PMPM/Risk Score TCI = Risk Adjusted PMPM/Peer Group Risk Adjusted PMPM Clinic scores for TCI are compared to the Oregon Average of

18 Total Cost Relative Resource Values (TCRRV) Calculation of Weights used for Resource Use Index Scale of values designed to evaluate resource use across all types of medical services, procedures and places of service. Each service is assigned a number of resource units (weights) using a CMS based approach for components of care: Inpatient: MS-DRG (Medicare Diagnosis-Related Grouper) Outpatient: APC (Ambulatory Payment Classification) Professional: RVU (Relative Value Units) Pharmacy: NDC (National Drug Code) Average Wholesale Price Services are effectively re-priced to standard values. Adjusted to actual cost distribution across components of care. TCRRVs are additive, as dollars are, across components of care. 18

19 HealthPartners Total Resource Use Resource Use Index (RUI) Resource Use Numerator Resource PMPM = (Total Medical TCRRV/Medical Member Months) + (Total Pharmacy TCRRV/Pharmacy Member Months) Denominator Risk Score Rate Calculation Risk Adjusted Resource PMPM = Resource PMPM/Risk Score RUI = Risk Adjusted Resource PMPM/Peer Group Risk Adjusted Resource PMPM Clinic scores for RUI are compared to the Oregon Average of

20 Clinic Comparison Reports Separate Adult and Pediatric reports Commercial health plan patients 33% commercial population Data from 7 health plans 421,000+ covered lives Cost, quality and utilization are compared to Oregon average Delivered to 176 practices with 600+ attributed patients Two rounds of reports 2013 & 2014 have been sent, with plans for annual delivery going forward 20

21 Clinic Comparison Report Package Report Package Contents Cover letter Definitions and Glossary Sheet Report Demographics & Cost Overview Professional Outpatient Imaging and ER Inpatient Chronic Conditions Pharmacy Frequently Asked Questions (FAQ) Includes Section on How to Use These Reports

22 Price Index Q Corp Clinic Comparison Reports Overall Summary by Service Category Clinic OR Average Raw Adj Price PMPM PMPM PMPM TCI = RUI x Index Professional $ $ $ Outpatient Facility $69.00 $62.25 $ Inpatient Facility $71.08 $64.13 $ Pharmacy $73.92 $66.70 $ Overall $ $ $ Clinic scores are risk adjusted to account for variations in illness burden. Clinic Risk Score 1.11 Clinic 1.00 OR Average High Price 1.15 High Price Low Use High Price High Use , Low Price Low Price Low Use Low High Use Use Resource Use Index (RUI) Other Oregon Clinics Clinic Low Price High Use

23 Price Index Q Corp Clinic Comparison Reports Cost Detail Overall Summary by Service Category Clinic OR Average Raw Adj Price PMPM PMPM PMPM TCI = RUI x Index Professional $ $ $ Outpatient Facility $69.00 $62.25 $ Inpatient Facility $71.08 $64.13 $ Pharmacy $73.92 $66.70 $ Overall $ $ $ Inpatient PMPM by Service Category Clinic OR Average Adj Price PMPM PMPM TCI = RUI x Index Acute Admissions $64.13 $ Surgical $46.98 $ Medical $9.55 $ Maternity $4.11 $ Mental Health $3.49 $ Non-Acute $0.00 $ All Admisssions $64.13 $ Inpatient Price vs. Resource Use Comparison by Clinic High Price High Price Low Use High Price High Use , Low Price 0.75 Low Price Low Price Low Use High Use Low Use Resource Use Index (RUI) Other Oregon Clinics Clinic High Use

24 Variation in Cost vs. Quality Variation exists in quality and cost: Among clinics across the state Among regions around Oregon Among clinics within any region 24

25 National Benchmarking: Variation Exists This work is based on the patented algorithm of HealthPartners, Inc. (Bloomington, MN) and is used with their permission 25

26 What s driving the variation? This work is based on the patented algorithm of HealthPartners, Inc. (Bloomington, MN) and is used with their permission 26

27 Cost Drivers: Why are Oregon s Prices Higher? In states with lower utilization rates the price of services is often increased. Cost-shifting: Medicare reimbursement rates are low in Oregon. Provider and Health Plan negotiation can play a role. Limited competition can lead to higher prices. 27

28 Priorities for Total Cost of Care Expanding to Medicare Fee For Service and exploring potential to expand to Oregon s Medicaid population Collaboration with local stakeholders to analyze spending trends across regions and payer types Develop tools to help stakeholders address costs Benchmark reports for 2015 & 2016 Public reporting Spread to additional communities 28

29 Opportunities to support MACRA and APMs We need public and private data combined to transform healthcare- follow the people Providers need the ability to see entire population during multiple regional and national transformation and payment reform efforts health plans and providers cannot do this on their own, no matter how large Quality improvement activities on the ground at practice level sense making all providers and stakeholders need this information together to change care and outcomes Standardize methodology and metrics stop the madness! 29

30 MACRA Playbook on June 22, 2017 Announcing the Oregon MACRA Playbook Conference: Medicare's Quality Payment Program and the Move to Value-Based Care 30

31 Thank You Mylia Christensen, Executive Director Meredith Roberts Tomasi, Sr. Director of Affordability and Transparency Douglas Rupp, Analytics Manager- Affordability and Transparency / Mylia.Christensen@Q-Corp.org / mchristensen@healthinsight.org Meredith.Roberts.Tomasi@Q-Corp.org Douglas.Rupp@Q-Corp.org 31