A legacy of primary care support underscores Priority Health s leadership in accountable care

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1 Priority Health has been at the forefront of supporting primary care, driving accountability, improving quality and improving care for patients. A legacy of primary care support underscores Priority Health s leadership in accountable care Burton F. VanderLaan, M.D., F.A.C.P Priority Health Medical Director, Network Effectiveness July 2013 This article is made available to you compliments of Priority Health. Copyright 2013.

2 Executive summary Primary care is fundamental to affordable health care. Yet a dire shortage of primary care providers in Michigan threatens to create a health care crisis with longer waits for appointments, shorter visits, higher prices and lower quality care. This fundamental issue will be exacerbated in 2014 and beyond as the number of insured increases due to health care reform. Priority Health has been at the forefront of industry advancements for over 25 years, supporting primary care and assigning medical homes to improve the quality, access and affordability of care for patients. We will remain at the forefront through our Partners in Performance program, which is designed to support physicians in delivering excellent, affordable care to their patients. Working together, Priority Health and our primary care physician partners have produced outstanding results for Michigan communities year after year. About the author: Burton F. VanderLaan, M.D., F.A.C.P. is the Priority Health medical director for network effectiveness. He is responsible for improving performance of the networks and delivery systems by developing and implementing medical management programs in partnership with Priority Health physicians and hospitals. 2

3 Priority Health s support of primary care saves lives and money Dozens of research studies have demonstrated that a strong primary care sector leads to lower health care costs and improved quality. Yet it remains largely underfunded in the United States, which limits its effectiveness in reducing cost and improving quality. 1 A primary care crisis is pending in Michigan: An Urban Institute analysis 2 indicates that the number of insured residents in the state will increase by 750,000 when health care reform requires most Americans to carry insurance. This insurance coverage will have little impact if those individuals are denied access to care due to a shortage of primary care providers. financial incentives can increase the revenue that high-performing practices receive from Priority Health by percent. Because these payments are linked to clinical performance, patients are winners, too. For example, we pay physicians for achieving benchmark performance in the following clinical areas to save lives, improve the health of our communities and lower costs: 2012 PIP PROGRAM AWARDS $28,095,452 TOTAL INCENTIVES AWARDED $24,311,449 awarded to physicians Largest individual PCP award $119,816 $50, PCPs earned each (More than 3x the number of PCPs who earned this level in 2011.) Why this shortage of primary care? The number of U.S. specialists per capita has risen dramatically over the past 40+ years, perhaps because a specialist earns as much as three times more income than a primary care provider. As a result, only 35 percent of U.S. physicians choose primary care compared with 50 percent in other industrialized nations. 3 Priority Health has demonstrated its commitment to addressing this dilemma with outstanding results. Over the past 17 years, Priority Health has paid $190 million in support of primary care over and above standard payment for services nearly $25 million was paid in 2012 alone. In practical economic terms, these Breast and colon cancer screening based on our preventive health care guidelines. Immunizations for children and adults. Chronic disease management for diabetes, high blood pressure and other conditions. Appropriate use of costly goods and services including brand-name vs. generic drugs and appropriate use of emergency room services. We measure and report results. As a result, we ve consistently ranked among the top health plans in the United States in quality and efficiency outcomes based on the accountability $3,784,003 awarded to hospitals of health plans for reporting performance 4. (NCQA, 2012) Transparency is fundamental to our approach. While many plans don t record or report this data, much less expose it to public scrutiny, Priority Health has published physician quality ratings online since All of this demonstrates that we take a strategic, intentional approach to accountability physicians are held accountable for performing at a continued > 3

4 high level, and Priority Health is held accountable by both its members and the community it serves. Working together, Priority Health and our primary care physician partners have produced outstanding results for Michigan communities year after year. This work is critical to our communities. Improved access and cost containment may be impossible without it. 5 Priority Health was built on a strong foundation of primary care. Our continuing support of primary care will help physicians thrive in a changing world. Learn more Accountable care seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients The Evolution of Accountable Primary Care at Priority Health The past: A strong foundation. Priority Health has demonstrated ongoing commitment to accountable primary care with generational improvements that built on previous years results First generation patientcentered primary care. As a result of combined efforts by Priority Health and primary care physicians who focused on access, quality and member satisfaction, Priority Health earned full accreditation by the National Committee for Quality Assurance Second generation patientcentered primary care. Priority Health introduced an early attribution model with the concept of population health: Each patient selected a primary care physician and the affiliated physicians or physician/hospital organizations (POs and PHOs) assumed risk for managing the cost of care for their populations. Priority Health also provided funding to support the startup and administration of a number of PHOs First generation pay-forperformance (P4P). To allay potential concerns about withholding care due to risk agreements, Priority Health introduced one of the first P4P programs in the country, offering primary care physicians the opportunity to gain incremental revenue for achieving strong performance on quality, access and member satisfaction metrics Succeeding generations of P4P. With each passing year, more primary care physicians participated in the expansion of the P4P program, reaping increased rewards for quality metrics. In 2001, Priority Health began reporting primary care physician performance electronically on priorityhealth.com. In 2003, the bar was raised further: 90th percentile performance was required for payout for most quality metrics. Physicians responded with benchmark performance. That same year, payments for achieving performancebased outcomes around chronic conditions diabetes, hypertension, etc. were added Web-based patient registry to measure results and enable collaboration. Priority Health was an early promoter of the web-based registry. This provides physicians with actionable information about their patient populations by reporting patient-specific data regarding gaps in care for services that are essential to maintaining or improving the health of their Priority Health patients Fourth generation patient-centered primary care. Priority Health funded efforts by a number of practices across the state to transform their business model to one that is team-based and patient-centric. Lessons learned are being rapidly disseminated to other practices. In the same vein, the Children s Healthcare Access continued > 4

5 Program (CHAP) provided significant education and clinical support to a variety of pediatric practices, including community-based practices, federally qualified clinics and the DeVos Children s Hospital residency clinic. This resulted in improved access and care for the enrolled Medicaid population of children Priority Health joins state initiative transforming primary care. In July 1, 2013, Priority Health joined the Michigan Primary Care Transformation (MiPCT) project. The project is aimed at reforming primary care payment models and expanding the capabilities of patient-centered medical homes (PCMHs) throughout the state. As a participant, Priority Health will use its extensive experience with physician quality and incentive programs to further support primary care in Michigan and improve health care coordination and management, practice transformation and performance outcomes. Goals of MiPCT In its attempt to support primary care, the MiPCT project seeks to: Align incentives for physicians Improve management of chronic conditions; and reduce emergency department visits for routine care that could be supported in a doctor s office and reduce hospital readmissions Address end of life issues through consistent training of primary care physicians around advanced directives and palliative care Ensure all participating physician organizations have common training, expectations and reporting mechanisms The present: Relentless pursuit of excellence. In moving toward the vision of optimal patient-centered care, Priority Health has long supported the goals of improving health, enhancing each member s experience with the health care system and providing affordable coverage. Affordability is the most vexing challenge as health care cost trends continue to increase at 2-3 times the consumer price index 7. The cost of health care for a family of four has doubled since 2002*, and will double again by 2021 if an 8% health care trend continues. Overall, cost trends for Priority Health run significantly below national trends; however, continued improvement in this area is critically important to our customers and our nation, and it receives laser-focused attention on a daily basis. In response to this challenge, Priority Health enhanced its Partners in Performance program to better support physicians in the delivery of accountable care. This strategic approach is built on four pillars: Attribute relationships. We do what others can t: Every Priority Health member is linked to a medical home and every provider is linked to an accountable care network. Measure outcomes. We re transparent: We establish benchmarks for usage, quality, costs and member satisfaction. Then we measure results and report this comparative information. Health care costs doubling every 10 years $41,868 The cost of health care for a family of four has doubled since 2002*, and will double again by 2021 if an 8% health care trend continues. $9,235 $10,168 $11,192 $12,214 $13,382 $14,500 $15,609 $16,771 $18,074 $19, *Milliman Medical Index continued > 5

6 Collaborate. We work with providers: We tackle opportunities that improve the quality of care, enhance the patient experience and make health care more affordable. Reward value. We pay for results: Building on our 25-year history, we reward prevention, improved clinical outcomes and the delivery of cost-effective care. Additional support opportunities for primary care in 2013 include: Performance-based payments that support primary care infrastructure development. Potential to explore shared savings payment strategies that drive integrated, coordinated care. Under these payment models, primary care physicians will have opportunities to share in the savings. reiterated by health care experts nationally, including Terry McGeeney, President and CEO of TransforMED, an affiliate of the American Academy of Family Physicians, who noted, New payment mechanisms will reward the value of comprehensive care and move away from rewarding volume or partial, fragmented care. We have seen this trend evolve in insurance pilots around the country. We are seeing it play out in expectations of primary care by hospital systems and large groups in ACO projects. Now we are seeing it evolve with CMS. 8 PCP AWARD HISTORY $21.8M ($3.15 pmpm) PREVENTIVE HEALTH Care managers and health navigators, who help manage DIABETES patients with complex conditions and illnesses, traverse our complex delivery system. Comprehensive evidence-based $3.9M OTHER DISEASE MANAGEMENT INFRASTRUCTURE care can keep patients out of our hospitals and emergency rooms, generating better outcomes and saving dollars. Transparency regarding the use of medical services by $17.4M ($2.35 pmpm) our networks. This information will prove vital in driving the elimination of unnecessary variations in care. 50% enhancement of P4P payments as compared to 2010 for quality and disease management to practices that achieve external recognition as patient-centered medical homes. 92% increase over 2010 $5.6M $3.4M $3.2M $11.3M ($1.61 pmpm) $5.3M $2.6M The future: Unwavering commitment to excellent, affordable care. The vision of Priority Health is to provide optimal patientcentered care to each individual care that is appropriate for age, gender and condition, that is evidence-based and that 800% increase in infrastructure payment over 2010 $3.5M $5.0M produces the best outcomes at an affordable price. To that end, we re advancing payment reform and integrated care that assists patients in successfully navigating our complex delivery systems. The validity of this approach has been $9.0M 2012 $2.7M $5.3M $1.0M continued > 6

7 Priority Health will achieve the lofty goal of providing optimal, patient-centered care to each individual only through intense engagement with our members and the clinicians within our communities who deliver care. We must align economic incentives. We must help our members take accountability for their own health and well-being. And we must be transparent with clinical and cost information to our communities. Practice teams led by primary care physicians are key to that strategy. Their accountability for the health of a population must be clear. Primary care physicians must change the way they work: They must view themselves as leaders of practice teams and vital cogs in the delivery system, not simply as purveyors of care. They must assume leadership in physician and physician-hospital organizations. They must influence their organizations to develop the competencies that will be critical to future success. Some of those requirements will be: Strong, effective primary care physician leadership that strikes a balance with the influence of the specialist physicians and hospitals in the delivery system Adequate organizational infrastructure that is capable of driving improvements in efficiency, member experience and quality A philosophy that supports collaboration across the interests of physicians, health systems and insurers, that requires mutual respect and that shares the vision of comprehensive patient-centered care Willingness to move from the current focus on unit cost to a focus on rewards for demonstrated value, including cost management and clinical outcomes Willingness to recognize the need for a budget The ability to view an uncertain future as a positive opportunity to contribute to the greater good of our communities A strong, effective primary care base that is capable of delivering superb outcomes at an affordable price to a population of patients Specialists Hospice Lab PCP 7

8 Investing in accountable primary care for children Children on Medicaid tend to have poorer health and more costly care than privately insured children due to lack of access to primary care. As part of its mission to provide all people with access to affordable and excellent care, Priority Health is providing 15,000 Kent County children with a medical home through the Children s Healthcare Access Program (CHAP), a collaboration established in 2008 between Priority Health, community leaders, business groups, Heart of West Michigan United Way, Helen DeVos Children s Hospital, federally qualified health clinics (FQHCs), private pediatric offices and human service agencies. From the baseline year to 2010, improvements included: A 13.8% decrease in emergency department use A 12.3% decrease in inpatient stays A 2011 cost-benefit analysis confirmed that the investment by Priority Health yielded a good return. The amount of the investment was offset by savings in emergency department and inpatient claims. Estimates show that Michigan could save between $150 and $200 million each year if children on Medicaid had access to primary care. Sources: 1 Sepulveda, Bodenheimer & Grundy, Buettgens, Bodenheimer, T. C., HEDIS 5 Bodenheimer & Pham, NCQA, 2011 (HEDIS) 7 Mayne, Girod & Weltz, McGeeney, 2012 Bibliography (HEDIS), H. E National Committee for Quality Assurance. Bodenheimer, T. C. (2009). Confronting the Growing Burden of Chronic Disease: Can the U.S. Health Care Workforce Do the Job? Health Affairs, Bodenheimer, T., & Pham, H. H. (2010). Primary Care: Current Problems and Proposed Solutions. Health Affairs, Buettgens, M. H. (2011). Health Reform Across the States: Increased Insurance Coverage and Federal Spending on the Exchanges and Medicaid. New Brunswick, NJ : Robert Wood Johnson Foundation. Mayne, L., Girod, C., & Weltz, S. (2011). Milliman Medical Index. Seattle, WA: Milliman. McGeeney, T. (2012). Report from the CEO: The Era of the Comprehensivists. Retrieved February 24, 2012, from transformed.com: CEOReports/era_of_comprehensivist.cfm NCQA. (2011). National Committee for Quality Assurance. Sepulveda, M.-J., Bodenheimer, T., & Grundy, P. (2008). Primary Care: Can It Solve Employers Health Care Dilemma? Health Affairs,