Value based reimbursement in Sweden Health Care Conference in London March 15, 2013 1 Agenda Background, bundle payment systems Total hip/knee replacement in Stockholm Spine surgery in Stockholm Next steps in Sweden 2
What is the ultimate goal of the health care system? Goals Access Quality (?) Cost containment Better Integration Safety Patient satisfaction (?) Etc. Value= Health Outcomes Cost on patient level Lack of clarity? Difficult to unite around? Conflicting goals? 3 No focus on value/efficiency today Care process Care Activity Follow up by health plans is focused on activities and productivity No systems for systematic follow up of efficiency Reimbursement is focused on activities Extra reimbursement for treatment of complications No incentives for innovation and improvement of efficiency Complication Health Outcomes Reimbursement System > Incentives > Provider behavior > > +/ Value Cost at patient level 4
Reimbursement system trends Reimbursement can be described in: Degree of bundling Level and type of Pay for Performance (P4P) Bundled payment Unbundled payment Degree of bundling Block budget Capitation Episode Time period Episode Intervention Per case/drg Per diem Fee for service Possible P4P Process measures (volume, LoS, turn around time, adherence to protocol etc.) Health Outcome measures (EQ5D, pain level, survival etc.) EU: unbundling towards DRG USA: Bundling towards DRG USA: Patient protection and Affordable health care act 2010 Primary care often reimbursed in mix between capitation and fee for service Hospital care increasingly reimbursed through DRG Increased international interest for bundle payment, Adapterad från the Department of Health, NHS 2011 5 Bundle Payment Systems expected to drive value development Bundle Payment System Package price Outcome based reimbursement Complication warranty Free right of provider establishment Informed patient choice of provider Improved value? = Improved outcomes Reduced cost on patient level Sick pat 1 500 AED 40 000 AED 3 000 AED/night 1 500 AED Initial visit Operation Post-op Follow-up / Rehab Healthier pat complication Bundled price + outcome based reimbursement 6
Incentives effects of different reimbursement systems Bundled Unbundled Block budget/salary Capitation Episode Time period Episode Intervention Per case/drg (Swe) Per diem Fee for service Increased activity + ++ ++ ++ ++ +++ Cost control +++ +++ ++ ++ + Primary prevention Secondary prevention Coordination of care Improved outcomes + +++ + +++ +++ +++ + ++ +++ +++ + + +++ +++ + + + Improved value + +++ +++ + (Adapterad från WHO 2000, Charlesworth 2012, Busse 2011) 7 Currently great international interest for bundle payments but few full scale implementations 1984 (Texas Heart Institute) fixed reimbursement for heart surgery Cost reduced by half with sustained outcomes 1987 1989 (Michigan) fixed reimbursement orthopaedic surgery with two year complication warranty 40% reduced cost for the health plan 1996 1997 (Medicare) Coronary Artery Surgery Reduced cost of $ 43.3 m(11.5%) Reduced risk adjusted mortality 2006 ProvenCare within Geisinger Health System Shorter ward time, higher likelihood to be discharged to home and less likelihood to become readmitted 2006 PROMETHEUS 2010 Diabetes care in the Netherlands Improved organisation and coordination between involved providers Improved adherence to guidelines 2010 Provisions for bundled payments are included in both the Patient Protection and Affordable Care Act and the Affordable Health Care for America Act. Medicare Pilot program starting in 2013 8
Agenda Background, bundle payment systems Total hip/knee replacement in Stockholm Spine surgery in Stockholm Next steps in Sweden 9 Background Bundle Payment System for hip and knee replacements introduced in Stockholm in 2009 for ASA1 2 patients 6 300 EUR per operation for authorized providers including Pre/per/post operative care Implants Complications up to 5 years after the procedure Requirements >100 procedures/surgeon before starting, >50 per year Laminar flow in OT Joint study Karolinska Institutet, Harvard Institute for Strategy and Competitiveness and the Swedish Hip Arthroplasty Register Interviews (providers, patients, Stockholm County) Analysis of register data (consolidation of data from 11 sources/ registers) Preliminary report in March 2012 Publications and final report December 2013 10
Total consumption increased initially but thereafter decreased. Waiting times reduced Total consumption increased initially but thereafter decreased Waiting times reduced or removed No signs of change in indication for surgery Konsum on 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 2718 Konsum onssvolym & andel väntande >90 dagar 33% 3363 3162 3721 13% 3379 3507 2900 10% 1116 1135 2996 13% 1319 35% 30% 25% 20% 15% 10% 5% Andel väntande>90 dagar 0 2004 2005 2006 2007 2008 2009 2010 2011 Icke vårdval Vårdval Andel väntande>90 dagar Sthlm 0% 11 Increased focus on productivity and outcomes improved treatment process Significant change of care process (4 out of 9 providers) Process mapping and standardisation New manuals and checklists Certification of personnel Benchmarking visits at other providers in Sweden and abroad Introduced extra follow up visit to avoid infection (3 out of 9 providers) The Complication Warranty has increased our focus on reducing complications. I have to say that it increases the quality. Provider GM in interview 12
Increased focus on productivity and outcomes increased OT productivity Increase of operations per day/team/theatre (3 out of 9 providers) Increased overall utilization of OR resources ~17% Reduced time between operations, not prolonged working day Variation between providers 3 > 5 op/day 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Average nr of procedures per day per team per theatre 3.1 3.1 3.5 3.6 3.6 3.7 3.7 3.6 2007 2008 2009 2010 2011e DRG & OrthoChoice pat OrthoChoice pat We have increased the productivity on our OR with 33 50 % Provider GM in interview 13 Increased focus on productivity and outcomes reduced ward time 4 providers reported reduced ward time Quantitative analysis show reduced ward time after the introduction of OrthoChoice adjusted for temporal trends, sex and type of procedure (P>0.001) 7.0 6.0 5.0 4.0 3.0 6.4 5.9 Average ward time per annum (Not including third party provider ward episodes) 6.1 6.1 6.0 5.8 5.1 4.6 4.4 4.1 4.0 4.0 2.0 1.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 All OrthoChoice 14
Development of cost on payer level Total kostnad [TSEK] 80 70 60 50 40 30 20 10 0 Antal opererade pa enter och kostnad per pa ent 5,000 72.3 4,479 67.9 4,297 4,315 4,500 60.9 59.8 59.9 4,000 3,721 3,507 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2007 2008 2009 2010 2011 Kostnad per pa ent Antal opererade pa enter Totalt antal opera oner Total kostnad [MSEK] 300 250 200 150 100 50 0 Antal opererade pa enter och total kostnad per ersä ningssystem 238 3,507 269 3,721 193 4,479 177 80 80 4,297 4,315 165 94 2007 2008 2009 2010 2011 Total kostnad DRG/övrigt Antal opererade pa enter 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Total kostnad vårdval Totalt antal opera oner 2008 >2011 Average cost: 17%, Volume: +16%, Total cost: 4% 15 Patient Reported Experience 98% of patients were satisfied or very satisfied Best result ever achieved according to the Stockholm County (Comparative data not available) Providers that increased their treatment volume had, as a group, significantly better results on 30 out of 40 questions (not adjusted for other factors). We don t get patients for for free anymore, but we really need to make an effort to attract patients. We need to have a good reputation and People need to know we are a high quality provider, that is a prerequisite for being able to continue running the center and keeping our jobs. Provider GM in interview 16
Providers view on new payment system In general positive Price too low and should be differentiated based on case mix Capacity for sicker patients improved at acute care hospitals Good with transparency around results but hesitation around ranking Complication warranty needs to be defined more clearly and claims management needs to become more effective Residence training programs need to follow patient flow 17 Preliminary results bundle payment for THR/TKR in Stockholm Preliminary results Improved coordination of care Significantly improved OR productivity Improved focus on outcomes and avoidance of complications 98% satisfied patients Providers overall positive 2008 >2011 16% increased volume (equivalent to the rest of the country) Waiting times removed 4 % reduced total cost The Complication Warranty has increased our focus on reducing complications. I have to say that it increases the quality. Provider GM in interview We have increased the productivity on our OR with 33 50 % Provider GM in interview we really need to make an effort to attract patients. Provider GM in interview 18
Agenda Background, bundle payment systems Total hip/knee replacement in Stockholm Spine surgery in Stockholm Next steps in Sweden 19 New reimbursement system for spine surgery Developed in collaboration between Stockholm county Swedish Association of Spine Surgeons Reimbursement based on Patient Reported Outcome Package price with complication warranty Case mix adjustment Expected implementation: autumn 2013 Sick pat 1 500 AED 40 000 AED 3 000 AED/night 1 500 AED Initial visit Operation Post-op Follow-up / Rehab complication Healthier pat 3 data sources, 11 years of patient data VAL Care consumption, 7500 patients SWESPINE outcomes, 25 000 patients Stockholm Spine Center cost per patient data, 2 000 patients Bundled price + outcome based reimbursement 20
Outcome based reimbursement Global Assessment: How is your pain now compared to before the operation? 3 000 kr 2 000 kr 1 000 kr 0 kr 1000 kr Peter2 outcome Peter Predicted Peter2 outcome Outcome based reimbursement with two components Global Assessment score Difference between predicted level and actual (case mix adjustment) Outcome based reimb. = GA Score + Case mix adjustment Peter1 = 3 000 SEK + 1 000 SEK = 4 000 SEK Peter2 = 1 000 SEK + 1 000 SEK = 0 SEK 21 Agenda Background, bundle payment systems Total hip/knee replacement in Stockholm Spine surgery in Stockholm Next steps in Sweden 22
Why Sweden? Long experience of public and private interaction Good access to outcome data from registries Good access to production data in county administrative databases DRG as reimbursement system facing scepticism 23 Next steps for Sweden National initiative by Ministry of Health led by and the Stockholm County 8 models over three years Total Hospital Budget with mix of bundle payment and DRG in 200x Plug and play IT system for management and analysis of bundle payment Collaboration with health systems in other countries! Bundle 1 Bundle 2 Bundle 3 Bundle 4 Bundle 5 30 DRG 24
Thank you! per.batelson@ivbar.com 25